How Slovakia has kept the confidence fairy

James W. Dean, Eva Muchova and Jan Lisy

Journal of Policy Modeling, 2013, vol. 35, issue 4, 487-503

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.

Keywords: Slovakia; Euro-crisis; Central and Eastern European transition (search for similar items in EconPapers)
JEL-codes: E61 F41 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:35:y:2013:i:4:p:487-503

DOI: 10.1016/j.jpolmod.2013.02.003

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