Model of optimal institutional growth of the republic of croatia in crisis caused by pandemic covid-19
Project leader
Vesna Buterin, PhD
Project team members
Bojana Olgić Draženović, PhD
Full professor Marinko škare, PhD (external team member)
Stella Suljić Nikolaj, PhD, postdoctoral researcher
Zvonimir Savić, MSc, doctoral student
Summary
Institutional development and growth are one of the most important
factors in the economic growth of former socialist countries in the transition
period. During the 2008 global crisis, former transition countries with more
developed institutions recovered far faster and more successfully than
countries with low levels of institutional development, including Croatia. The
global COVID-19 pandemic heralds a recession that is projected to far outweigh
the extent and consequences of the last recession. In the current institutional
development, the recovery of the Croatian economy will be long-lasting and with
uncertain outcome. By adopting a model of rapid and systematic institutional
growth, Croatia could use the upcoming crisis as an opportunity to change its
economic paradigm by creating a stimulating institutional environment. Therefore,
the role of the state and institutions in the pandemic crisis becomes crucial,
in order to achieve the exit from the crisis and economic growth as soon as
possible, to mitigate the adverse effects of the crisis from the perspective of
institutional investors and to examine the institutional framework of the CNB's
monetary policy towards deposit financial institutions and the economy to
counteract the negative effects of the pandemic crisis. In the current
circumstances, Croatia would need years of continuous institutional growth to
economically move closer to most of the former transition countries, but this
sudden change in global economic conditions provides Croatia with a new
opportunity. The aim of this project is to investigate and propose measures for
introducing a model of institutional change that, during the crisis, will lead to the necessary
assumptions for economic growth but also to fundamental changes in the sources
of economic growth. The new model system would allow the prediction of pandemic
asymmetric shocks at the aggregate and institutional levels to mitigate crisis
resulting from pandemic shocks.
Key words
institutions, institutional development, economic growth, pandemic crisis, financial system, institutional investors, deposit financial institutions, multiple cycle methods, Croatia
