Political Aspect of the Saving – Investment Gap in Croatia

Abstract

<p>All the Governments of Croatia should acknowledge the importance of the economic policy<br />that will encourage higher saving rates thus enabling correlation with the investment rate with<br />the scope of reaching important macroeconomic goals, such as the GDP and employment<br />rates increase, etc., without in any way endangering the macroeconomic stability of the<br />national economy. Regardless of the great impact savings had on the investments, the<br />implementation of the economic or investment policy on behalf of the Right-wing<br />Government of Croatia had a great impact in creating the discrepancy in the<br />saving-investment ratio, than it was the case with the Left-wing Government of Croatia. If the<br />Right–wing Government of Croatia starts implementing the economic policy with the sole<br />scope of reaching higher saving rates than the former ones, complying with their ideology,<br />and focusing less on how to opportunistically reach middle voters, they will influence<br />effectively the saving and investment correlation, thus lessening the saving-investment gap<br />and reaching the macroeconomic stability. However, if the Right-wing Government<br />opportunistically turn to the “middle voters” instead of following their ideology`s programme,<br />this could lead to the decrease in efficiency of some economic policy measures with the goal<br />of reaching a certain saving-investment correlation. On the other hand, with the growth in<br />saving rates, Left-wing Government of Croatia can influence effectively its correlation with<br />the investment rates, but still in a lesser proportion compared to the Right–wing Government<br />of Croatia. With the Left–wing Government of Croatia opportunistically orienting on the<br />“middle voters” that would facilitate their position in achieving the macroeconomic stability<br />and thus enforcing their influence on the saving-investment correlation, as would not be the<br />case if only complying with their left oriented party`s programme.</p>