ACHIEVEMENTS OF ECONOMIC POLICY IN OVERCOMING THE EFFECTS OF THE GLOBAL ECONOMIC CRISIS ON SERBIAN ECONOMY

Aleksandra Prascevic

Faculty of Economics, University of Belgrade, Belgrade, Serbia

The paper deals with the extent to which the economic policy in Serbia has managed to respond to the economic problems imposed by the global economic crisis and how the restrictions in the form of political instability and political influence, present also before the crisis, influenced the economic policy formulated to combat the crisis. Globally, the economic crisis has resulted in the fact that instead of the rules in economic policy making, with the key objective of maintaining price stability, now discretion and fiscal policy are being promoted, with the aim of overcoming the problem of unemployment. Significant use of discretion in economic policy generally imposes the problem of competence and possible political motives of the economic policy makers. It is the limitations of underdeveloped institutions and a wrong model of growth that have contributed to the fact that the results of economic policy in Serbia have not been significant. Serbia is facing the negative consequences of the measures implemented in the form of high budget deficits, public debt and inflation, while the effects on economic activity and employment have failed, causing present choice between rules and discretion.

Keywords: global economic crisis, economic policy, political macroeconomics

JEL Classification: E60, E62