Macro-economic model of aggregate market in the Albanian economy, and relevant problems thereto

Abstract

This paper uses concrete data obtained on the Albanian economy to analyse the positions of aggregate demand/supply curves in the economy. As examples from micro-economics, we have taken the models of Ŵalras and Marshall, to view the possibilities of achieving an economic equilibrium. Data available from the Albanian economy, and from the global economic trends generally, have shown that the positions of curves are such, with differences in their inclination, while the classic position of the aggregate demand curve, with a negative trend, studied in the macro-economic theory, is unique. Therefore, our objective is to try and show the scholars of the field that the macro-economic problems must be viewed in this light, and not through the static scheme used so far.The equilibrium is met not only when the aggregate demand and aggregate supply curves are met, meaning when the aggregate expenditure are equal to aggregate production, but it exists at every moment, independently of whether it is consistent or not, while the pricing trends continue to increase, similar to two other aggregates. The understanding of such a situation should give the possibility to governments and other policy-making institutions to review their positions and relations with monetary and fiscal indicators, in a view of making the organic connection, and increasing their working effectiveness. The paper aims to show how one can define the relation between monetary and fiscal policies necessary to see their role and relevance in the economic growth of a country.