Abstract
Macedonia is a country that is close related to the European Union countries where the majority of the Macedonian foreign trade is with the European Union countries (52%). So the Macedonian economy is in a high level dependency of Euro. Since Denar is connected closely to Euro, and the level of its usage in everyday economic activity is close to the usage of Denar, it is obvious to be discussed as a dilemma whether Macedonia should have Euro as its currency. However, the problem lies in that whether it is the right time for such action as the best solution for Macedonian economy, keeping in mind the fact that in the international arena there is present a second crisis that is the crisis of Euro-Zone.Based on various sources and on our econometric results, in this paper is argued and supported the main hypothesis that the fix exchange rate for Macedonia is a more optimal choice in comparison with the unilateral euroisation and flexible exchange rate. Thus, during the research we found out some arguments that support the existing regime, such as: under a flexible regime an eventual devaluation of the Denar is more possible, which can lead to more negative effects on the economy than benefits. Thus, devaluation of the Denar will have no significant effects on the balance trade (export and imports) and GDP. This means that the competitiveness of a country relies on the other factors. In addition an eventual devaluation of the Denar, it will not have significant effects on monetary aggregates (M2 and M4) due to the asset substitution from Denar deposits to foreign deposits and vice-versa.
Highlights
1.1 Studies Aim The main aim of this research is to analyze the effects that an eventual devaluation of the Denar against Euro has on certain macroeconomic variables The second aim of this research is to find a better solution toward the coordination of the monetary and fiscal policy in order to achieve positive effects on the economy and to overcome the recession period caused by the global financial economic crisis of 2008 and 2011
It is a fact that the families that live in Macedonia ensure a good portion of their budged through the emigrants
Comment: Despite all these economic struggles of Macedonia and the crisis that have captured the EU countries with which it collaborates and is tightly connected, there is as well a negative attitude of the European Central Bank (ECB) which doesn’t welcome the unilateral euroisation, where an adaptation of Euro outside the Treaty leads to the effects that are against the basic economic justification of the European Monetary Union.[21]
Summary
1.1 Studies Aim The main aim of this research is to analyze the effects that an eventual devaluation of the Denar against Euro has on certain macroeconomic variables (export and imports of goods and services, and on monetary aggregates) The second aim of this research is to find a better solution toward the coordination of the monetary and fiscal policy in order to achieve positive effects on the economy and to overcome the recession period caused by the global financial economic crisis of 2008 and 2011. In order to realize the aim of this study, we have used the quantitative method known as: Vector Error Correction Methodology This method is used to obtain the effects that exchange rate have on monetary aggregates (M2 and M4) and on the balance trade components (export of goods and services). From all point of views this financial crisis is considered as one of the most economic events, it is considered as a phenomenon that is similar to the Great Depression (1929 – 1939).[4] It shocked United States but the entire world as well, especially the economy of the European Union, with which Macedonia is closely linked in economic and the social aspect In such circumstances, keeping in mind the fact that Macedonia has a small and open economy; the exchange rate has remained its political instrument. As a result of the problems with the payments of the Greek public debt caused achieving the culmination in 2010
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