I. Introduction: As one of the former republics of the Soviet Union, Moldova is among a group of countries in central Europe that is in the process of transitioning economy from a planned to a market economy. Over the years, Moldova has adopted free market policies that are believed to lead the country on a path of economic growth and freedom. Transition economists agree to a number of things involved in the transition process, that countries in this category must embark on, to ensure full transition to a market economy. This process calls forth a drastic restructuring of institutions. As such, Ukraine has adopted policies aimed at this goal. Despite such progressive efforts, the rate of growth has been disappointing compared to that of neighboring countries embarking on a similar path of economic transition. This paper reviews the factors affecting Moldova’s economic growth over the years; particularly addressing how the transition process has been negatively affected by ineffective reform implementation. I will attempt to show the roles of aid dependency and corruption in preventing the country’s full transition from planned to a market economy. New Growth theories suggest that savings is necessary for economic growth. Therefore, II. Economic Theory: Reasons for longer business cycle expansions include, Globalization: This has enabled businesses to maintain their margins of profit without having to raise selling prices when the costs of production of goods and services rise within the country. It allows firms to source products worldwide. As we know, globalization has occurred because of falling transportation costs, increase in information and communications technology. However, when the described situation occurs, resulting in...
... middle of paper ...
...ct foreign investors with accordance to growth potential. Moldova’s government could engage in policies that will see increases in per capita income. As income increases, savings also increase. Evidence of increased savings and investments should serve to draw in more foreign savings. In addition, the country’s government could also pursue policies to ensure economic stability. This lowers investment and savings risk in the system. Moldova’s government could also run continuous budget surpluses to avert recession and maintain growth, which would certainly attract foreign savings. Finally, the country may also engage in policies that will increase the number of working people in the population. This may be through increasing the retirement age or through other means. This would increase savings within the country and eventually reverberate to increase foreign savings.
In conclusion, regardless of Macropoland’s current economic condition, it is fair to say that it is all part of the business cycle. The business cycle has three parts: peak, trough, and peak. The peak is the date that the recession starts. In Macropoland’s case, the peak would be at the beginning of 1973, its trough somewhere between 1973 and 1974, and then its peak again at 1974. In the second scenario, Macropoland is either at its trough, where it is about to head up again because of its low inflation rate, or it is at its expansion, on its way to heading to its next peak.
Transnistria is still dependent on Russia both for the improvement of education as well as for the flow of new textbooks. However, concerning the medical infrastructure, this de facto state has to count on the help of others, but predominantly the aid of Russia is of key importance for them (Blakkisrud and Kolstø, 2013). The purchase of companies in Transnistria by Russia is seen as an investment from the economic and geopolitical point of view. The most effective and advantageous of all the factories owned by Russia in Transnistria is the Moldovan Steel Plant (Chamberlain-Creanga and Allin, 2010). Russia is also the main market for Transnistrian exports (Blakkisrud and Kolstø, 2013). The position of Russia in Transnistria enables the de facto state to run smoothly (Cantir and Kennedy,
Once elected, Gorbachev set out to establish his power in the Soviet Union. Formerly a powerhouse during the early years of rapid economic growth, the Soviet Union was withering away due to the lack of cheap materials available, stagnant population growth, and a lack of trade and mobilization because of previous reforms ratified by Stalin. After years of inert growth during Leonid Brezhnev’s reign, the Soviet Union was in vital need of a new economy, a...
in the post war period. It laid out the groundwork for economic expansion in three ways: First agricultural boost after the war increased the demand for cotton and Tabaco. Second, improvements of transportation increased the demand for better roads and canals to expedite goods smoothly across the nation. Lastly was the factory system growth which was caused by the Embargo Acts and the War of 1812. The war was a benefit to the domestic factor, providing a plentiful labor support.
The business cycle is the short-run alternation between economic downturns and economic upturns (Investopedia n.d.). A recession is an economic downturn and happens in every country and some recessions are worse than others and the output of GDP and employment are falling farther and faster. The great depression lasted from 1929-1933 and was a deep prolonged downturn in the business cycle before a recovery/expansion of the business cycle occurred and GDP and employment started to rise (Krugman & Wells. 2012). The next recession lasted from 1981-1982 and was comparatively smaller than the first (Krugman & Wells. 2012). More recently in 2001 a slump in the economy was noted and was followed by the great rescission of 2007-2009 (Krugman & Wells. 2012). Recession is defined as a “period of at least two consecutive quarters (a quarter is three months) during which the total output of the economy shrinks” (Krugman & Wells. 2012). In the United States the National Bureau of Economic Research (NBER) is assigning the task of determining when a recession begins and the NBER looks at a variety of economic indicators such as employment and production (Krugman & Wells. 2012). Every business cycle recession has a negative impact on the economy the recession’s deferrer on the strength of the impact on the country. Consider the two charts for Figure 21-5 of the more recent recessions of 2001 and 2007. The Recession of 2001 did not last as long as the recession of 2007 and did not have as much of an economical hardship on the business cycle and as shown 2007 dipped greatly in industrial production. In the second chart it demonstrates a recession at the point the economy turns from expansion to recession or the business-cycle peak. Then in the char...
Harrison, M. (1993) “Soviet Economic Growth Since 1928: The Alternative Statistics of G. T. Khanin” from Europe-Asia Studies Retrieved 26th March 2014 [http://www2.warwick.ac.uk/fac/soc/economics/staff/academic/Harrison/public/eas93.pdf]
Since the late 1980’s the Russian people have experienced one of the most drastic transitions seen in the world to date, a transition from an attempt at communism to a workable capitalist system. As one would expect, this transition has not been painless and has been the impetus of many distressing problems for the Russian people. One such problem is organized crime. This paper will explore how organized crime during Soviet rule and the Russian Federation has created obstacles in this transition to a functioning market economy. It will illustrate how organized crime has done this by analyzing its transition from the USSR to the Russian Federation, the reasons behind its existence today, and how its operation impairs Russia’s attempts at a market economy. It will also provide some possible solutions for the crises organized crime has created, which currently plague the Russian people. Organized crime has worked its way through openings provided by the transition economy to become a setback to the Russian society and economy. Its existence disables successful economic reform by influencing important issues such as competition, entrepreneurship, capital flight, the shadow economy, and violence.
Russia, a vast country with a wealth of natural resources, a well, educated population, and diverse industrial base, continues to experience, formidable difficulties in moving from its old centrally planned economy to a modern market economy. President Yeltsin's government has made substantial strides in converting to a market economy since launching its economic reform program in January 1992 by freeing nearly all prices, slashing defense spending, eliminating the old centralized distribution system, completing an ambitious voucher privatization program, establishing private financial institutions, and decentralizing trade. Russia, however, has made little progress in a number of key areas that are needed to provide a solid foundation for the transition to a market economy.
...d lend less money. During such period the central bank pumps more money to the local economy which it already secured through the bailout money from Russia. Also, it does adjust its policy allowing Banks to keep lower capital, thus allowing more money available for lending and stimulate the economy. The central Bank also made higher ruble rates for those who have saved in dollars before devaluation of the currency and help those with Belarus rubles make purchases in dollars (Belarus scraps currency restrictions, 2011). The foreign businesses such as automobile industry have many vehicles on the lot, but needs additional foreign currency such as euro or dollar for procuring services and parts. The local Ruble needs to strengthen its values otherwise, many foreign and multinational companies will have to close its business due to lack of access to the foreign exchange.
The present risk assessment work emerged from my interest in the BRIC countries and the fact that they represent a big part of the world’s economic potential. In the following analysis I will focus on the main economic, political and financial risks in Russia.
The Soviet Union, which was once a world superpower in the 19th century saw itself in chaos going into the 20th century. These chaoses were marked by the new ideas brought in by the new leaders who had emerged eventually into power. Almost every aspect of the Soviet Union was crumbling at this period both politically and socially, as well as the economy. There were underlying reasons for the collapse of communism in the Soviet Union and eventually Eastern Europe. The economy is the most significant aspect of every government. The soviet economy was highly centralized with a “command economy” (p.1. fsmitha.com), which had been broken down due to its complexity and centrally controlled with corruption involved in it. A strong government needs a strong economy to maintain its power and influence, but in this case the economic planning of the Soviet Union was just not working, which had an influence in other communist nations in Eastern Europe as they declined to collapse.
The central bank is extremely important for an economy to operate properly. There are many roles the central banks must perform to stabilize the economy. However, stabilizing the economy by performing roles may not be sufficient enough. Sometimes, it takes other central banks to improve the overall performance. Such as, stated in the article, More Russian incursions would hurt Ukraine economy: central bank. The central banks today are a complex structure with various functions that operates as the ‘heart’ of the economy.
The Slovak Republic, or Slovakia, is located in Eastern Europe with a population of 5.4 million people and borders the countries of Poland, Austria, the Ukraine, and the Czech Republic (The World Bank). As originally part of the former nation of Czechoslovakia, the Slovak Republic has only recently begun to write its own history (Abizadeh, p. 171).
In order for any country to survive in comparison to another developed country they must be able to grow and sustain a healthy and flourishing economy. This paper is designed to give a detailed insight of economic growth and the sectors that influence economic growth. Economic growth in a country is essential to the reduction of poverty, without such reduction; poverty would continue to increase therefore economic growth is inevitable. Through economic growth, it is also an aid in the reduction of the unemployment rate and it also helps to reduce the budget deficit of the government. Economic growth can also encourage better living standards for all it is citizens because with economic growth there are improvements in the public sectors, educational and healthcare facilities. Through economic growth social spending can also be increased without an increase of taxes.
Economic growth also play a role in reducing debt to GDP ratios. Therefore, money can be spent on protecting the environment. With higher real GDP a society can dedicate more resources to promoting recycling and the utilization of renewable resources investment. Economic growth encourages investment and therefore encourages a virtuous cycle of economic growth.