PhD-Project: Macroeconomic Policy Regimes in Emerging Countries
Ph.D. Project – Macroeconomic Policy Regimes in Emerging Countries: The Case of Central Eastern Europe, Milka Kazandziska, Ph.D. candidate at the Kassel University
Post-Keynesian literature largely focused on using the concept of macroeconomic policy regimes to analyse the development of advanced economies (Heine/Herr/Kaiser 2006, Herr/Kazandziska 2011). This project aims at extending the applicability of this concept to emerging countries which are playing an increasingly important role in the world economy, hich is reflected in the increasing share of emerging countries in the world output from less than 20 per cent in the 1990s to slightly less than 40 per cent in 2013 (IMF 2016). Emerging countries have also become continuously more integrated in the world economy, and their share in the world trade has been increasing since the 1990s (ECB 2010). Emerging countries are interesting to be analysed because on the one hand they exhibit patterns of convergence towards the advanced world, but on the other hand, they have specific features which resemble the development of developing countries. Emerging countries are largely dependent on the world market, and the more open and liberalized their markets are, the more constraints they face in the use of various economic policy instruments (monetary policy, fiscal policy, foreign economic policy, wage policy, etc.). In this Ph.D. project ten Central Eastern European countries, which became members of the EU in 2004 and 2007 are analysed and they include: Poland, Czech Republic, Hungary, Latvia, Lithuania, Estonia, Slovenia, Slovakia, Bulgaria and Romania. This Ph.D. project on the one hand creates a theoretical framework for analyzing the economic development of emerging countries and on the other, is uses this theoretical framework to examine the functionality of the development in the Central Eastern European countries. For this purpose the concept of a macroeconomic policy regime is used according to which economic policies and institutional settings in which the economies are embedded play an important role in explaining the economic development of the countries. Six elements of a macroeconomic policy regime are identified: foreign economic policy, industrial policy, monetary policy, fiscal policy, wage policy and the financial system. Using a Tinbergen type of approach, each of these elements is assigned objectives, instruments and institutions in charge, which serves as a basis for the creation of a normative macroeconomic policy regime. Hence, a more general aim of this project is to propose an alternative way to the formulation of economic policies for emerging countries which is not a one-size-fits-all solution, but shall be rather conceived as a model, which is broad enough to capture the commonalities and specific challenges that emerging countries share, and yet, which leaves a room for an inclusion of the characteristics of the path-dependent and institutional-specific development of a single country.