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Sustainable growth and development in small open economies


  • Andrea Elteto

    (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)

  • Isidora Ljumoviæ

    (Institute of Economic Sciences, Serbia)


The paper builds on contributions coming from the theory of economic crises and the theory of international competitiveness, within a novel framework of economic resiliency. The empirical analysis, based on recent data and international comparisons, indicates close ties between unit labour costs and trade imbalances, with a potential to explain the lost momentum in economic growth. By decomposing unit labour costs into labour productivity and labour compensation indicators we found the wage policy a factor that contributes to the lost competitiveness of Southern EMU countries vis-a-vis a group of large exporting countries. The paper also discusses main policy dilemmas and some policy options’ implications.

Suggested Citation

  • Andrea Elteto & Isidora Ljumoviæ (ed.), 2018. "Sustainable growth and development in small open economies," Economic books, Institute for World Economics - Centre for Economic and Regional Studies- Hungarian Academy of Sciences, number 201804, November.
  • Handle: RePEc:iwe:ecbook:201804

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