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How Slovakia has kept the confidence fairy

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  • Dean, James W.
  • Muchova, Eva
  • Lisy, Jan

Abstract

Since its creation as a country in 1993, Slovakia's average real growth rate has been not only the highest among Eurozone countries, it has been the highest in the European Union. And unlike most “peripheral” Eurozone countries, most recently (March/April, 2013) Cyprus and Slovenia, it has not suffered from significant capital flight. We provide some clues as to why this is so. In contrast to many of the post-1989 Central and Eastern European (CEE) “transition” economies, as well as the troubled five “GIPSI” countries (Greece, Ireland, Portugal, Spain and Italy), Slovakia has kept unit costs competitive, fostered a sound banking system, and managed its monetary and fiscal policy responsibly. Both public and private debt is relatively low and largely funded from internal savings. In short, Slovakia offers lessons for many CEE countries as well as Eurozone countries struggling to restore internal and external balance.

Suggested Citation

  • Dean, James W. & Muchova, Eva & Lisy, Jan, 2013. "How Slovakia has kept the confidence fairy," Journal of Policy Modeling, Elsevier, vol. 35(4), pages 487-503.
    • Handle: RePEc:eee:jpolmo:v:35:y:2013:i:4:p:487-503
    DOI: 10.1016/j.jpolmod.2013.02.003
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Slovakia; Euro-crisis; Central and Eastern European transition;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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