Lessons from World Economic Crises: Cleaning, Remodeling and Harmonizing the Economy

Abstract

Every bigger economic crisis, as the current one, leaves behind a huge material damage to the world economy, and to separate national economies as well. However, every such crises reminds national authorities of the mistakes done in the past while creating and running macroeconomic policy and teaches them how they should overcome them in the upcoming period. That is the positive part of the crises: it should be understood as a good teacher who gives lessons based on which an ambient for a lasting and sustainable growth in future should be created. From the current economic crises we’ve learned that it worked as a purgatory: the weak and fragile companies fell down; the more resistant ones took the chance and became even stronger; new companies emerged which create optimism and faith in an upcoming sustainable course towards the expansive path of the economic cycle. The crisis reshapes the world economic map. Market forces are not in the same geographical borders as before. Spheres of interest are not the same as before. Competition on world markets gets new forms and players. The authorities of most of the countries became aware that they should remodel the domestic economy, if they wanted a better position in the incoming distribution of world markets. Finally, the crisis showed that a stabile economic growth may not be expected in future, either locally or globally, without appropriate harmonization of the basic instruments of macroeconomic policy: fiscal policy, monetary policy and foreign trade policy. Has Republic of Macedonia learned those lessons? How can its economy shift into a lasting and sustainable economic growth in the upcoming period? The simple and, at the same time, very complex answer would be: by remodeling its economy!