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The evolution of the Maltese economy since independence

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  • Grech, Aaron George

Abstract

This paper surveys the performance of the Maltese economy in the first half century since independence. The picture that emerges is of a nation that has benefitted from an extraordinary rate of economic growth and a significant reduction in volatility. The Maltese economy has matured exceedingly rapidly, with cycles of inflation and unemployment becoming much less pronounced and with a consistent underlying downward trend. The economic structure has shifted strongly towards services, which has led to an increased demand for labour that has accommodated the secular rise in female participation. The role of the state has changed dramatically, though as in other small open economies it continues to play a relatively more active economic function. The financial system has also altered beyond recognition, playing a more direct role in affecting economic activity. While the Maltese economy faces significant challenges, the strengths developed since independence will stand it in good stead.

Suggested Citation

  • Grech, Aaron George, 2015. "The evolution of the Maltese economy since independence," MPRA Paper 68392, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:68392
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    References listed on IDEAS

    as
    1. Grech, Aaron George, 2004. "Estimating the output gap for the Maltese economy," MPRA Paper 33663, University Library of Munich, Germany.
    2. Aaron G Grech, "undated". "Assessing employment in Malta," CBM Working Papers WP/01/2006, Central Bank of Malta.
    3. Brunner, Karl & Meltzer, Allan H., 1976. "The Phillips curve," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 1-18, January.
    4. Hubrich, Kirstin & Karlsson, Tohmas, 2010. "Trade consistency in the context of the Eurosystem projection exercises – an overview," Occasional Paper Series 108, European Central Bank.
    5. Grech, Aaron George, 2000. "The private and public savings gaps in Malta and their impact on the current account," MPRA Paper 33208, University Library of Munich, Germany.
    6. Hamilton, James D., 1990. "Analysis of time series subject to changes in regime," Journal of Econometrics, Elsevier, vol. 45(1-2), pages 39-70.
    7. Grech, Aaron George, 2004. "Unit labour costs in Malta: Trends and international comparisons," MPRA Paper 33666, University Library of Munich, Germany.
    8. Hendry, David F., 2000. "On detectable and non-detectable structural change," Structural Change and Economic Dynamics, Elsevier, vol. 11(1-2), pages 45-65, July.
    9. David E. Bloom & David Canning & Jaypee Sevilla, 2001. "Economic Growth and the Demographic Transition," NBER Working Papers 8685, National Bureau of Economic Research, Inc.
    10. Ms. Dora M Iakova, 2007. "Flattening of the Phillips Curve: Implications for Monetary Policy," IMF Working Papers 2007/076, International Monetary Fund.
    11. Grech, Aaron George, 2003. "The Framework of Monetary Policy in Malta," MPRA Paper 33464, University Library of Munich, Germany.
    12. Grech, Aaron George & Pace, Christopher, 2004. "The adoption of the European System of Accounts 1995 framework in the national accounts of Malta," MPRA Paper 33460, University Library of Munich, Germany.
    13. Grech, Aaron George & Grech, Owen & Micallef, Brian & Rapa, Noel & Gatt, William, 2013. "A Structural Macro-Econometric Model of the Maltese Economy," MPRA Paper 46128, University Library of Munich, Germany.
    14. Grech, Aaron George, 2015. "Structural changes in the Maltese cconomy," MPRA Paper 63632, University Library of Munich, Germany.
    15. Apostolides, Alexander, 2011. "The growth of two small economies in the Great Depression: GDP estimation for Cyprus and Malta during the interwar period (1921-1938)," MPRA Paper 30276, University Library of Munich, Germany.
    16. Aaron GRECH, 2014. "The Demand For Currency In Malta," Theoretical and Practical Research in the Economic Fields, ASERS Publishing, vol. 5(1), pages 49-55.
    17. Grech, Aaron George & Micallef, Brian, 2014. "Assessing the supply of the Maltese economy using a production function approach," MPRA Paper 53882, University Library of Munich, Germany.
    18. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
    19. Hubrich, Kirstin & Karlsson, Tohmas, 2010. "Trade consistency in the context of the Eurosystem projection exercises - an overview," Occasional Paper Series 108, European Central Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Aaron G Grech & Noel Rapa, "undated". "Trends in Malta’s current account and their underlying causes," CBM Policy Papers PP/03/2016, Central Bank of Malta.
    2. Brian Micallef, 2016. "Property price misalignment with fundamentals in Malta," CBM Working Papers WP/03/2016, Central Bank of Malta.
    3. Andrea Pace & Maria Attard & Michel Camilleri & Gianluca Valentino, 2023. "Urban Growth in a Mediterranean Island-State: A Data-Driven Study of Malta’s Development Permits in the Last Thirty Years," Sustainability, MDPI, vol. 15(22), pages 1-20, November.
    4. Noel Rapa, "undated". "The exit of the United Kingdom from the European Union – Its short-to-medium term impact on the Maltese economy," CBM Policy Papers PP/01/2017, Central Bank of Malta.
    5. Mr. Serkan Arslanalp & Mr. Marco Marini & Ms. Patrizia Tumbarello, 2019. "Big Data on Vessel Traffic: Nowcasting Trade Flows in Real Time," IMF Working Papers 2019/275, International Monetary Fund.
    6. Ilias Georgakopoulos, 2019. "Income and wealth inequality in Malta: evidence from micro data," CBM Working Papers WP/03/2019, Central Bank of Malta.
    7. Brian Micallef, "undated". "Estimating the Impact on potential output of structural reforms to Increase the female participation rate," CBM Policy Papers PP/03/2015, Central Bank of Malta.
    8. William Gatt, 2016. "Time variation, asymmetry and threshold effect in Malta's Phillips curve," CBM Working Papers WP/02/2016, Central Bank of Malta.
    9. Reuben Ellul, "undated". "Timing the Maltese business cycle: A historical perspective," CBM Working Papers WP/01/2021, Central Bank of Malta.
    10. Aaron G Grech, "undated". "Understanding the Macroeconomic Impact of Migration in Malta," CBM Policy Papers PP/04/2015, Central Bank of Malta.
    11. Owen Grech & Noel Rapa, 2016. "STREAM: A structural macro-econometric model of the Maltese economy," CBM Working Papers WP/01/2016, Central Bank of Malta.
    12. Reuben Ellul, 2018. "Forecasting unemployment rates in Malta: A labour market flows approach," CBM Working Papers WP/03/2018, Central Bank of Malta.
    13. William Gatt & Owen Grech, "undated". "An assessment of the Maltese housing market," CBM Policy Papers PP/02/2016, Central Bank of Malta.

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    More about this item

    Keywords

    Economic development; Industrial Structure; National Budget; Small States; Malta.;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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