FINANCIAL SECTOR AND GROWTH PROCESS IN SOUTH-EASTERN EUROPE'S FORMER SOCIALIST COUNTRIES: COULD A KALDORIAN CUMULATIVE CAUSATION APPROACH HELP TO BETTER UNDERSTAND THE LINKS BETWEEN THEM?
The reform and development of the financial sector was one of the most significant challenges that the former socialist countries faced during their transition to a market economy. At the start of this transition, their financial system was underdeveloped and centralised (monobank), where the centra...
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University of Pitesti
2017-07-01
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| Series: | Buletin ştiinţific: Universitatea din Piteşti. Seria Ştiinţe Economice |
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| Online Access: | http://economic.upit.ro/repec/pdf/2017_1_7.pdf |
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| author | Stavroula DIMKOU George MAKRIS |
| author_facet | Stavroula DIMKOU George MAKRIS |
| author_sort | Stavroula DIMKOU |
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| description | The reform and development of the financial sector was one of the most significant challenges that the former socialist countries faced during their transition to a market economy. At the start of this transition, their financial system was underdeveloped and centralised (monobank), where the central bank of each economy also functioned as a commercial bank. The restructuring, integration and development of the financial sector to enhance viability and enable it to respond to new demands was imperative, particularly for economic growth and the convergence of these economies with the developed economies of the region. This process of financial integration suffered a powerful shock with the economic crisis transmitted to the region in 2009.
The initial aim of this paper is to highlight the problems created after the global economic crisis affecting the financial institutions of the former socialist countries of South-eastern Europe, as well as the problems that already existed, though not apparent, and were nevertheless exacerbated by the outbreak of the crisis. An attempt to investigate the role of the financial sector, dominated by the banking sector, follows, with regard to achieving macroeconomic equilibrium among the economies of the countries in the region and the potential for sustaining it in future as part of a path to growth. To fully satisfy this goal, we propose that it is preferable to avoid a linear approach to the issue, abandoning equilibrium theory to adopt an analysis inspired by the method of cumulative causation, based on the work of Nicholas Kaldor. Our analysis allows us to postulate that, in a post-crisis period, conditions prevail for the potential appearance of future structural impasses of a cumulative nature, which could lead to a systemic crisis and leave the development process of the region's economies exposed. |
| format | Article |
| id | doaj-art-7253ad4c8f9748088a11e94e1eceae23 |
| institution | Matheson Library |
| issn | 1583-1809 2344-4908 |
| language | English |
| publishDate | 2017-07-01 |
| publisher | University of Pitesti |
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| series | Buletin ştiinţific: Universitatea din Piteşti. Seria Ştiinţe Economice |
| spelling | doaj-art-7253ad4c8f9748088a11e94e1eceae232025-08-02T10:57:49ZengUniversity of PitestiBuletin ştiinţific: Universitatea din Piteşti. Seria Ştiinţe Economice1583-18092344-49082017-07-011616073FINANCIAL SECTOR AND GROWTH PROCESS IN SOUTH-EASTERN EUROPE'S FORMER SOCIALIST COUNTRIES: COULD A KALDORIAN CUMULATIVE CAUSATION APPROACH HELP TO BETTER UNDERSTAND THE LINKS BETWEEN THEM?Stavroula DIMKOU0George MAKRIS1University of Macedonia, GreeceUniversity of Macedonia, GreeceThe reform and development of the financial sector was one of the most significant challenges that the former socialist countries faced during their transition to a market economy. At the start of this transition, their financial system was underdeveloped and centralised (monobank), where the central bank of each economy also functioned as a commercial bank. The restructuring, integration and development of the financial sector to enhance viability and enable it to respond to new demands was imperative, particularly for economic growth and the convergence of these economies with the developed economies of the region. This process of financial integration suffered a powerful shock with the economic crisis transmitted to the region in 2009. The initial aim of this paper is to highlight the problems created after the global economic crisis affecting the financial institutions of the former socialist countries of South-eastern Europe, as well as the problems that already existed, though not apparent, and were nevertheless exacerbated by the outbreak of the crisis. An attempt to investigate the role of the financial sector, dominated by the banking sector, follows, with regard to achieving macroeconomic equilibrium among the economies of the countries in the region and the potential for sustaining it in future as part of a path to growth. To fully satisfy this goal, we propose that it is preferable to avoid a linear approach to the issue, abandoning equilibrium theory to adopt an analysis inspired by the method of cumulative causation, based on the work of Nicholas Kaldor. Our analysis allows us to postulate that, in a post-crisis period, conditions prevail for the potential appearance of future structural impasses of a cumulative nature, which could lead to a systemic crisis and leave the development process of the region's economies exposed.http://economic.upit.ro/repec/pdf/2017_1_7.pdfFinancial sectorEconomic crisisSoutheast EuropeTransition EconomiesCumulative Causation Approach. |
| spellingShingle | Stavroula DIMKOU George MAKRIS FINANCIAL SECTOR AND GROWTH PROCESS IN SOUTH-EASTERN EUROPE'S FORMER SOCIALIST COUNTRIES: COULD A KALDORIAN CUMULATIVE CAUSATION APPROACH HELP TO BETTER UNDERSTAND THE LINKS BETWEEN THEM? Buletin ştiinţific: Universitatea din Piteşti. Seria Ştiinţe Economice Financial sector Economic crisis Southeast Europe Transition Economies Cumulative Causation Approach. |
| title | FINANCIAL SECTOR AND GROWTH PROCESS IN SOUTH-EASTERN EUROPE'S FORMER SOCIALIST COUNTRIES: COULD A KALDORIAN CUMULATIVE CAUSATION APPROACH HELP TO BETTER UNDERSTAND THE LINKS BETWEEN THEM? |
| title_full | FINANCIAL SECTOR AND GROWTH PROCESS IN SOUTH-EASTERN EUROPE'S FORMER SOCIALIST COUNTRIES: COULD A KALDORIAN CUMULATIVE CAUSATION APPROACH HELP TO BETTER UNDERSTAND THE LINKS BETWEEN THEM? |
| title_fullStr | FINANCIAL SECTOR AND GROWTH PROCESS IN SOUTH-EASTERN EUROPE'S FORMER SOCIALIST COUNTRIES: COULD A KALDORIAN CUMULATIVE CAUSATION APPROACH HELP TO BETTER UNDERSTAND THE LINKS BETWEEN THEM? |
| title_full_unstemmed | FINANCIAL SECTOR AND GROWTH PROCESS IN SOUTH-EASTERN EUROPE'S FORMER SOCIALIST COUNTRIES: COULD A KALDORIAN CUMULATIVE CAUSATION APPROACH HELP TO BETTER UNDERSTAND THE LINKS BETWEEN THEM? |
| title_short | FINANCIAL SECTOR AND GROWTH PROCESS IN SOUTH-EASTERN EUROPE'S FORMER SOCIALIST COUNTRIES: COULD A KALDORIAN CUMULATIVE CAUSATION APPROACH HELP TO BETTER UNDERSTAND THE LINKS BETWEEN THEM? |
| title_sort | financial sector and growth process in south eastern europe s former socialist countries could a kaldorian cumulative causation approach help to better understand the links between them |
| topic | Financial sector Economic crisis Southeast Europe Transition Economies Cumulative Causation Approach. |
| url | http://economic.upit.ro/repec/pdf/2017_1_7.pdf |
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