The Second Decade of Transition in Emerging Europe: The Age of Capital Infolws, Macroeconomic Imbalances and Financial Fragility

Ognjen Radonjić, Srdjan Kokotović

Година издања: 2012 .
Формат (цм): 24 цм
Број страна: 192

In this book Ognjen Radonjić and Srdjan Kokotović reject widely prized and adopt paradigm of efficient markets and universally undisputed measures of economic success of small open economies, such as macroeconomic stabilization and full liberalization and deregulation of financial and trade flows. In contrast, as authors emphasize, if policy creators do not limit the level of debts of local market participants, most importantly the short-term debts and debts denominated in foreign currency, which is in the most cases directed towards consumption and development of non-tradable sectors, crisis is certain. This is because, prior to and during massive capital inflows, local economy has not created foundations for sustained development necessary not only because debts have to be repaid, but also to provide more economic independence in the future. All in all, this book represents refreshment in both domestic and international literature and indisputably bears scientific contribution to present and future analysis of this quintessential economic issue.

Professor Miodrag Zec, Faculty of Philosophy, Belgrade, Serbia

The above analysis, inspired by Minsky's financial instability hypothesis and extended to financially integrated emerging economies has yet had little echo in the literature dedicated to the crisis effects in Central, East and Southeast European transition economies. ...The present study addresses precisely this perspective. Through a very rich and detailed country data analysis, the build-up of the fragility as well as the consequences of the U.S. banking crisis is exemplified, analyzed and explained. The analysis confirms the interest and accuracy of a Minskyan perspective in understanding the transition economies of Europe. ...The robustness of the analysis leads to a severe report of the situation in emerging Europe countries and singularly in Serbia. The policy prescriptions, which arise from the analysis, are all the more interesting and promising.

Professor Christine Sinapi, Burgundy School of Business, Dijon, France

The authors of the book in front of you enter innovative territory in the attempt to apply the Minsky's financial instability hypothesis - developed in the context of advanced economies - to emerging economies. Analyzing a range of macroeconomic indicators for eleven Eastern European economies in more detail the publication sheds light on similarities and differences in their economic experiences during the latest crisis. ... Overall, the publication is a valuable contribution to a more nuanced view of Eastern Europe amongst economists and investors. Emerging markets particularly if members of one regional group are typically lumped together by investors, neglecting often stark differences in economic fundamentals. The latest crisis and more recently the European sovereign debt problems have demonstrated that regional blocks are not necessarily characterized by economic convergence. ...For now, the authors have provided a well-rounded piece of work on the impact of the global economic crisis in Eastern Europe.

Ewa Karwowski, Economics Department, School of Oriental and African Studies, London, UK


Ognjen Radonjić (1975) is assistant professor of Economics at the Faculty of Philosophy, University of Belgrade. He is a member of the Institute for Sociological Research, Belgrade, Scientific Association of Economists of Serbia, World Economics Association, Bristol, UK and editorial board of the Sociology, journal of sociology, social psychology and social anthropology. He is the author of the book Financial Markets: Risk, Uncertainty and Conditional Stability (in Serbian) and a number of articles on macroeconomics and financial markets related topics. Radonjić received a PhD in economics from the Faculty of Economics, University of Belgrade.

Srdjan Kokotović (1976) is an economist in the Resident Representative Office of the International Monetary Fund in Serbia in charge of monetary and financial issues. Previous engagements include bank supervision within the National Bank of Serbia and managing Risk Controlling Department and Office of the Chief Economist in Hypo Alpe Adria Bank, Belgrade. He also managed privatization projects and financial analysis within the Deposit Insurance Agency. Srdjan Kokotović was a member of editorial board of the Quarterly Monitor of Economic Trends and Policies, journal published by the Foundation for the Advancement of Economics (FREN). He wrote a number of articles in the field of financial stability and development, economic policy and real sector development. Kokotović obtained a MSc degree in quantitative finance from the Faculty of Economics, University of Belgrade.

ISBN 978-86-86563-99-6