TFP AND ENDOGENOUS GROWTH IN SOUTH EAST EUROPEAN COUNTRIES WITH SPECIAL FOCUS ON ALBANIA

The main objective of this paper is to determine the forces that have driven the economic growth in Albania relative to Southeast and Central European countries from the beginning of transition period year 1993 until 2008, before the global crises was spread in developing countries. We are based in Growth –Accounting approach in order to specify the role of total factor productivity (TPF) as growth enhancing factor in different phases of their economic development and an econometric analyze of major growth factors based on endogenous growth theory. The main findings of this paper are: (1) TFP and capital accumulation has been playing an important role for all countries under survey, the impact of labor as growth enhancing factor has been limited (2) macroeconomic stability,trade openness, and investment in infrastructure matters to growth. Therefore we support the idea that Albania government should give priority of scare government resources towards these sectors.Productivity, economic growth, panel data analyze

An empirical assessment of alternative exchange rate regimes in medium term in Albania

This paper examines the alternative exchange rate regimes and their feasibility to be applied in Albania in medium term. In all empirical work done until now is been found a very low relationship between money and inflation in Albania before and after using the indirect instruments of monetary control. As a result, the motivation for finding other strategies for monetary policy and exchange rate policy is strong and has opened the debate of practitioners in this field. We argue that moving from freely floating exchange rate regime and informal IT strategy in formal IT strategy would be a more preferable strategy that will deal better with the fragile sustainability of current account deficit in Albania but not without problems to be applied. --

Price development in Albania

Even though inflation has been low in the last years in Albania and inside the target rate of about 3 percent determined by Bank of Albania, considering the relevance of this variable for economic activity there is room for careful analysis in order to make evident the potential threatens of domestic price stability. The main objective of this paper is twofold, first analyzing sub-indexes of CPI basket in order to determine the major volatile components, and second aim is to qualify the relative importance of different transmission mechanisms of monetary policy, by using VAR approach. The main finding of this work is that rent fuel and power that constitute the second large sub-indexes of CPI with the weight 24 percent have been the most volatile categories for time period 2000-2008, followed by food sub-index that has the highest weight in Albania CPI basket of about 43 percent. Econometric model has found evidence that money supply is important determinant factor for domestic inflation. There is an immediate response of inflation to shocks in the exchange rate. Even though the exchange rate continues to be an important variable for explaining inflation in Albania, with the development of financial market its importance will decrease. Total loans to GDP ratio in Albania have increased substantially in the last year, and we believe that the importance of lending channel will further increase in Albania with the development of financial market

An empirical assessment of alternative exchange rate regimes in medium term in Albania

This paper examines the alternative exchange rate regimes and their feasibility to be applied in Albania in medium term. In all empirical work done until now is been found a very low relationship between money and inflation in Albania before and after using the indirect instruments of monetary control. As a result, the motivation for finding other strategies for monetary policy and exchange rate policy is strong and has opened the debate of practitioners in this field. We argue that moving from freely floating exchange rate regime and informal IT strategy in formal IT strategy would be a more preferable strategy that will deal better with the fragile sustainability of current account deficit in Albania but not without problems to be applied

Introducing National Health Accounts in Albania

The health sector is defined as the priority sector in the Albanian Strategy for the social and economic development. The Albanian Health sector is in the continuing transformation in the function of the realization of the proper standards. To realize the reform in this sector and to help the decision makers in their decision is necessary to have the right information on the source of the financing of health sector, on the destination of the expenditure in this sector and their control. Preparing the NHA in accordance with the International Standards in this field, should do possible and the comparability of the performance of the indicators of health sector with them of other country, so that the Albanian authorities and International organization which support the development of this sector in Albania, for the proper definition of the way and the funds necessary to develop this sector in Albania. In this paper has been evidenced the actual problems of the development of the Health sector in Albania and are given some recommendation for the preparing of the NHA in Albania. The main recommendation include the necessity to build a technical body to collect and analyze data, to have an "steering committee" to interprets the results in terms of the policy implications, and refers of this results to the legislative body to enact and implement a policy in health sector development

Tax Capacity and Tax Effort: Evidence From Albanian Economy

The potential tax capacity is very important for assessing the tax space for policy response, especially after the COVID-19 crisis. The main objective of this paper is to study the tax capacity of the Albanian economy, relative to other transition economies with the same patterns of development. We rely on a regression-based approach for the period of 1998-2022 to estimate the potential tax capacity and tax effort. The study found that the structure of the economy, per capita income, openness to foreign trade and corruption are the most consistent explanatory variables of the potential tax capacity. The study also found that tax effort is below one for the Albanian economy, and tax-to-GDP collections are below the average level of the transition economies. We conclude that the country should continue improving the governance quality and fighting corruption to improve tax collection. The study does not support further increases in the statutory tax rates

Price development in Albania

Even though inflation has been low in the last years in Albania and inside the target rate of about 3 percent determined by Bank of Albania, considering the relevance of this variable for economic activity there is room for careful analysis in order to make evident the potential threatens of domestic price stability. The main objective of this paper is twofold, first analyzing sub-indexes of CPI basket in order to determine the major volatile components, and second aim is to qualify the relative importance of different transmission mechanisms of monetary policy, by using VAR approach. The main finding of this work is that rent fuel and power that constitute the second large sub-indexes of CPI with the weight 24 percent have been the most volatile categories for time period 2000-2008, followed by food sub-index that has the highest weight in Albania CPI basket of about 43 percent. Econometric model has found evidence that money supply is important determinant factor for domestic inflation. There is an immediate response of inflation to shocks in the exchange rate. Even though the exchange rate continues to be an important variable for explaining inflation in Albania, with the development of financial market its importance will decrease. Total loans to GDP ratio in Albania have increased substantially in the last year, and we believe that the importance of lending channel will further increase in Albania with the development of financial market