Post on 04-Jan-2016
Three Post-Crisis Questions for Macroeconomic Policy in
Southeast Europe
Susan SchadlerBank of Greece, SEESOX Conference
October 16, 2009
SEEs: A Modest Growth Record
per capita GDP Growth
-2
0
2
4
6
8
10
12
14
1995-1999
2000-2004
2005-2007
1995-1999
2000-2004
2005-2007
1995-1999
2000-2004
2005-2007
1970-1974
1975-1979
1980-1984
SEE CEE Other comparabledeveloping countries
Greece
(per
cent
)
I. Is export orientation important?
0
10
20
30
40
50
60
70
80
90
100
0 2 4 6 8 10 12
GDP per cap growth (1995-2008)
Ex
po
rts/
GD
P
Yes, but it has a downside.
0
10
20
30
40
50
60
70
80
90
100
-6 -1 4 9 14
GDP per cap growth (2007-2009)
Ex
po
rts/
GD
P
II. Does using foreign savings hurt growth?
-20
-15
-10
-5
0
5
10
15
20
25
0 2 4 6 8 10
GDP per cap growth (avg, 1995-2008)
(GF
CF
-Do
mes
tic
Sa
vin
gs)
/GD
P
No, but some capital importers suffered in the crisis
-40
-30
-20
-10
0
10
20
30
40
50
-20 -15 -10 -5 0 5 10 15
GDP per cap growth (2007-2009)
(GFC
F-D
omes
tic s
avin
gs)/G
DP
III. Can risks be reduced without losing benefits of globalization?
Leave fiscal space for stimulus
Self insure? Seems to help, but why?
Flex or fix? The debate will still rage.
Tax speculative flows? Idea whose time has come.
Should countries self-insure?
0
10
20
30
40
50
60
70
80
-2 0 2 4 6 8 10 12
GDP per cap growth (avg, 1995-2008)
Off
icia
l res
erve
s/M
2 (2
000)
Do reserves help in a global crisis?
0
20
40
60
80
100
120
140
160
-20 -15 -10 -5 0 5 10 15
GDP per cap growth (2007-2009)
Off
icia
l re
serv
es/M
2 (
2007)
Time will tell
Do countries save all they invest?
-10
0
10
20
30
40
50
60
12 17 22 27 32 37
GFCF/GDP
Gro
ss d
om
esti
c sa
vin
gs/
GD
P
Do countries need to save all they invest? (IV)
Countries with public debt ratio below 30 percent Countries with public debt ratio above 30 percent
-20
-15
-10
-5
0
5
10
15
-20 -15 -10 -5 0 5 10
GDP per cap growth (2007-2009)
(GFC
F-Do
mes
tic S
avin
gs)/G
DP
-5
0
5
10
15
20
25
-8 -6 -4 -2 0 2 4 6 8
GDP per cap growth (2007-2009)
(GFC
F-Do
mes
tic S
avin
gs)/G
DP
Do countries need to save all they invest? (IV)
-20
-15
-10
-5
0
5
10
15
20
-20 -15 -10 -5 0 5 10
GDP per cap growth (2007-2009)
(GFC
F-Do
mes
tic S
avin
gs)/G
DP
-5
0
5
10
15
20
25
-8 -6 -4 -2 0 2 4 6 8
GDP per cap growth (2007-2009)
(GFC
F-Do
mes
tic Sa
ving
s)/GD
P
Countries with public debt ratio below 40 percent Countries with public debt ratio above 40 percent
How has growth in SEE stack up to other countries? (may be omitted)
per capita GDP Growth
-2
-1
0
1
2
3
4
5
6
7
8
1995-1999
Albania
2000-2004 2005-2007 1995-1999
FYR Macedonia
2000-2004 2005-2007
(per
cent
)