The power quality is defined through the standard EN 50160. Consumer areas where the power quality of supplied falls outside the standard EN 50160 pose a problem, causing dissatisfaction among consumers and inefficiencies for distribution companies, leading to losses and system inefficiencies. The most vulnerable areas are primarily those farthest from the corresponding transformer station. Due to voltage drop along the lines, voltage values at the network’s end points may fall below the recommended minimum. In such locations, the network is sensitive to voltage sags. In these cases, rehabilitation of voltage conditions is necessary to bring the power quality parameters within prescribed values. This paper presents new solutions for improving voltage conditions in low-voltage electrical distribution networks and outlines the advantages of these solutions compared to previously used ones.

After a multi-year period of low interest rates and monetary expansions following the so-called great moderation, the issue of how to protect capital from value erosion became highly relevant once again. Recent notable increase in inflation re-woke theoretical and practical disagreements about what causes inflation in the first place, in which ways and to what extent inflation is being costly for both households and investors, and in particular how if at all households are able to protect their modest portfolios. Inflation undoubtedly erodes the value of corporate earnings as well as profits of financial intermediaries, thereby impacting virtually all asset classes and all kinds of investors. Nonetheless, it is usually the harshest on the receiving end, since predominantly households are most badly hit by inflation, especially those with fixed - or way too slowly adjusting incomes. Therefore, during a period of accelerated inflationary pressure, it becomes ever more important for all parties to obtain financial instruments that effectively protect capital from value erosion. The question arises of where to invest in order to at least preserve value i.e. keep up with the inflation rate in terms of investment returns. The aim of this research is to measure the correlation between real estate performance and inflation in order to determine whether this type of asset can be a good source of protection against inflation. Also, the aim of the paper is to compare the real estate protective potential against inflation with the performance of stocks, bonds and gold in conserving inherited purchasing power.

Overcoming macroeconomic hurdles as a trade assumes that branches of government are almost continuously charged with various assignments, or particular tasks attached to a finite set of resources and talents owned by organizational subunits with decision rights in corrective policy-making. Even though open-economy cases of disinflation programs reminded us quite a while ago that one task need not be assigned to one single resource exclusively, the overwhelming belief in mainstream macro to this day is that monetary policy remains chiefly responsible for both causing and stopping harmful inflation spirals. This paper, however, follows a novel wave of literature that doubly questions the aforementioned notion. It appears that the usual suspects for the recent rise of inflation worldwide are found not guilty; hence, we stand by the rare few who advocate that inflation in a modern non-Ricardian setting, when it finally spiralled out of control, represents but a legitimate and inevitable consequence of irresponsible fiscal policies and unsustainably high public (and private) debts. Moreover, due to the familiar if reversed Fisherian effect, intermediated monetary restriction via interest rate hikes turns out to be an unsafe, rather controversial reaction of central banks when it comes to reasonably swift and reliable preference for an outcome of such disinflation endeavours.

The appearance of asymmetric loading in the low voltage power distribution network has a negative effect on the voltage profile and power quality. In order to successfully analyze the conditions of the low voltage power supply, this paper presents simulated and analyzed voltage disturbances along the distribution network radial lines for the occurrence of different three-phase power system loading. In the simulation, the influence of asymmetric loading, section length and character of loads on the measured values is presented. The effects of distributed or concentrated loads at individual points of the power lines in terms of the voltage conditions improving were specifically considered.

In this paper we argue that in spite of the grave economic, political and health consequences of the ongoing exogenous crises (COVID19 cum economic downturn stemming from Russian-Ukranian conflict), before too long Serbian tourism exhibited something similar to the V-shaped recovery (and then some) by means of a) government subsidies, b) substituting domestic for (temporarily) absent foreign tourists and by c) soaring prices of tourist services at stable exchange rate which more than compensate the industry for the reflation comeback.

The outburst of COVID-19 pandemics has heavily contracted and structurally altered both the size and the flows of international trade throughout 2020 and 2021. Even though contagion effect on global trade is clearly a negative one for a number of reasons elaborated in the paper, we venture to argue that this is in fact an evolutionary, expected and unavoidable consequence of the globalisation process itself. Among the key trends affecting the present and future of the international trade, roughly half of them are fully independent and the other half at best semi-dependent from the pandemics itself. In other words, it appears that the bell tolls for the wrong suspect, in as much as the two phenomena might be coextensive, not to mention the ideological and operational confusion behind recently widespread deliberations to deploy trade policies in order to simultaneously achieve several non-trade objectives of dubious compatibility. Notwithstanding the grim prospects on the horizon, some Mediterranean economies, if proven capable, may yet turn out to be the unintended winners of the silver lining.

Research Question: The objective of this particular piece of research was to evaluate the condition of the real estate market in the period preceding the pandemic outbreak. Motivation: Our goal was to determine whether real estate has been overpriced, i.e., whether and when speculative bubbles began to form and whether there were indications of their bursting. This paper brings together the need for discussing theories that can potentially explain the real estate market bubbles and boom-bust cycles (Gleaser &Nathanson, 2014) and the new approach which proved promising to detect the exuberance of economic and financial activities (Phillips, Shi &Yu, 2015). Potential collapse of real estate prices would have devastating effects and would likely cause a collapse of the financial system. Idea: The core idea of this paper was to evaluate whether speculative bubbles could be detected in the real estate market over the period immediately before the outbreak of the COVID-19 virus pandemic, and whether the pandemic or the financial crisis arising from it led to bursting of bubbles in this market and consequently brought their economies into even deeper crises. Data: Quarterly price movements were analyzed in the real estate market in six countries: Italy, Spain, the United Kingdom, Serbia, Croatia and Slovenia in the period Q1 1980 - Q4 2019 for Italy, Spain and the United Kingdom; Q1 2002 - Q4 2019 for Serbia and Croatia and Q1 2007 - Q4 2019 for Slovenia. Tools: Empirical analysis has been performed by utilizing generalized sub-augmented Dickey-Fuller (GSADF) test of unit roots for the detection and data stamping of bubbles in the real estate market in time series at hand. Findings: In conclusion, grand European shutdown and COVID pandemic apparently did not prick multiplicity of previously formed real estate bubbles, at least not for the time being. Moreover, in several developing countries with stunted financial markets, the virus may have somewhat paradoxically solidified real estate prices and even sustained a build-up of rational real estate bubbles. Contribution: This paper expands previous research on real estate bubbles and provides new insights into the initial consequences of the COVID-19 pandemic.

Persistent and unsustainable current account deficits imply continuous foreign borrowing. In this study, we investigate the causal relationship between Turkish current account deficits (CAD) and growth, by using both traditional Granger and Frequency Domain Causality Tests developed by Breitung and Candelon (BC hereafter) over the period of first quarter of 2002 to the first quarter of 2017, since there is scarcely any definitive empirical study out there yet, systematically exploring the causal relationship between GDP growth and current account over short- and longer run. The results of the study indicate that rising CAD unidirectionally causes growth in both short- and medium-run. Thus, since CAD is financed mostly by short-term debt-creating inflows and Turkey is considered to be the most credit-dependent country across all emerging markets, while Turkey’s excessive reliance on foreign credit comes at the cost of extremely volatile real GDP growth rates, our result raises many doubts about sustainability and stability of future growth trajectory in Turkey.

Serbia and the world are facing the largest health-cum-financial crisis in the living memory. By utilizing the novel class of macroeconomic SIR models, we demonstrate that neither its origin nor its transmission is fully exogenous, but crucially depends on the complicated interaction of governments, firms and individuals? economic behavior. Hence, COVID-19 epidemics and provoked public health response exhibit profound economic and financial consequences that may well be mutually reinforcing. Paper dismisses neoliberal approach to pandemics, but also criticizes Serbian public policy as palliative and erroneously obsessed with amassing life-support machines. In fact, we argue that small open economies should focus on providing obligatory epidemiological gear and disinfectants to their population for public use while awaiting more effective medical treatment, especially after quarantines get called off. In terms of macroprudential policy and measures aimed at mitigating the economic crisis, even though reasonable at the onset, they would have to be fine-tuned and more sector specific as pandemics subsides. Instead of numerical guesswork with regards to the key macroeconomic stats, we inspected Serbian constellation in terms of likely growth trajectories without and with the second wave of contagion. From purely macroeconomic perspective, much depends upon the size and probability of capital flow reversals which so often additionally worsen the initial financial havoc. Thus, on top of conventional policy instruments, capital controls should play a greater role and must be deployed counter-intuitively to ongoing practice.

United States and China have recently found themselves engulfed in a full-blown trade war of epic proportions. This paper explores the probability that outcomes will match the expectations of their protagonists, weighs certain and likely costs along with potential gains for either side and discusses possible consequences for multilateral trading system as we know it. Moreover, paper reiterates why this trade war cannot have clear winners as well as why trade wars can never serve as sustainable and meaningful substitutes for well-meaning trade talks. Finally, article ends on a warning: trade war may easily contribute to already sinister outlook of yet another global financial crisis appearing on the horizon.

One of the key characteristics of the world economy in the last few decades has been the rise of foreign direct investments (FDI), which represent the major and most desirable form of capital flows from developed to developing and transition countries. The aim of this paper is to investigate specificities of FDI inflow to six small open transition economies of the western Balkans over the 2004-2014 period. Formal econometric tests carried out in the paper imply that-contrary to widespread ideology-FDI inflows exhibit at best no impact whatsoever or indeed a statistically significant negative impact on both GDP and GNP (cumulative) growth rates in the western Balkans. After exploring stylized facts and contrasting them with theoretical predictions, the article goes on to debunk several misconceptions in regard to motives, modes of operation and economic effects of FDI confronted with inconsistent, partial or outright detrimental government policies. The authors therefore call for a considerably different attitude towards FDI and the growth-generating concept in the Balkans.

International Business and Global Economy » 2018 » Tom 37 » A common currency for the East African community? Lessons from the introduction of the euro A A A

EU i SAD imaju najvecu globalnu ekonomsku vezu sa razmenom roba i usluga koja dostiže 2 mlrd. evra dnevno. Stoga, oduvek je postojao jasan ekonomski razlog za zakljucivanje sporazuma o slobodnoj trgovini između dve strane Atlantika; međutim finalizacija sporazuma se nije dogodila tokom prethodne dekade uprkos potencijalno ogromnim ekonomskim efektima. Analiticari smatraju da je iznenadno ponovno otkrice Evrope i njenog velikog tržista posledica neuspeha tzv. Doha runde globalnih trgovinskih pregovora, kao i uopsteno globalne ekonomske klime. Kljucni dokument koji cinu bazu za pregovore jeste izvestaj pripremljen od strane radne grupe za zaposljavanje i rast na visokom nivou između EU-SAD. Taj dokument predstavlja troskove i koristi od eventualnog Transatlantskog dogovora. Obostrane koristi proizilaze iz potencijalne eliminacije, smanjenja ili prevencije trgovinskih prepreka za robe, usluge, investicije, osobito necarinskih barijera u svim kategorijama ekonomske aktivnosti uz harmonizaciju njihovih razlicitih regulatornih i administrativnih režima. Glavna trgovinska pitanja između ove dve jurisdikcije ticu se gorucih tema XXI veka vezanih za tretman poljoprivrednih proizvoda, bezbednost hrane, posebno konzumaciju i diseminaciju određenih vrsta GMO, zastitu potrosaca i ekoloske standarde. Stoga, rad se bavi cost-benefit analizom i globalnim posledicama TTIP ne samo na relaciji SAD-EU, vec možda jos vise u odnosu potrosaca i interesa krupnog kapitala, narocito multiunacionalnih i transnacionalnih kompanija.

Contrary to mainstream opinions, with external deficit of more than 16% of GDP and foreign debt of 16 billion €, Serbia is at the verge of balance of payments crisis. It is most likely going to un† ravel as a sudden stop phenomenon, after which considerable real depreciation of national currency will be finally forced by both domestic and international portfolio adjustment. However, if Serbian monetary au† thorities manage to coordinate real exchange rate depreciation with urging reforms on a wider macroeco† nomic front, capital flow reversal does not necessarily have to bite into long†run economic growth and em† ployment. In fact, it might prove to be a starting ingredient of bottoming out. One thing is for sure: Serbia won’t be able to maintain the present level of spending for much longer. Hopefully sooner rather than later, irrational or morally hazardous exuberance shall dissipate and leave room for inevitable rebalancing along the national saving†investment axis.

Bitcoin, a peculiar crypto-currency has been the loudest buzzword in global finance over the last year or so, both for its spectacular and seemingly robust appreciation trend as well as for more recent equally ostentatious demise. After reviewing the history of bitcoin and specificities of its cyber-construct, this paper adds to the critical analysis of bitcoin as an international currency alternative. Lately, its volatility has been so excessive that it arguably cannot serve as a store of value. In addition, notwithstanding bitcoin's rising if bumpy credibility as a medium of exchange, since it has been immediately converted (by chief vendors) in either of the leading world currencies upon payment due to its extraordinary exchange rate volatility, bitcoin's unit of account potential appears to be dubious too. Moreover, bitcoin's next to none correlation with other major currencies' movements renders it unsuitable for managing FX risk or hedging purposes. Finally, having in mind that it lacks formal reserves or deposit-insurance scheme to back it up yet it's also prone to hacking, bitcoin resembles and behaves more like a pyramidal investment vehicle than a global currency alternative. Nevertheless, technology that made it be may still spawn an evolution in the way we posses things, transfer ownership and pay for goods and services in the near IT-ridden future.

Amidst XIX century, Principality of Serbia was still a country of small landowners with 73% of territory dedicated to agriculture, divided into fiefs up to 5 hectars in size. Owing to her geographic position, Serbia was simultaneously a transit area for trade caravans coming from South and Central Balkans as well as for those travelling from outhwest via N. Pazar. Therefore, trade has always played a rather important, vital role in development of the Principality of Serbia. hence, thriving and ever richer class of merchants quickly supported passing the Trade Bill for Principality of Serbia with authorisation of “Milos Obrenovic the First Serbian Principal along with agreement of the Council following proposal of the National Assembly” 26th of January 1860 A. D. The fact that this bill had been passed three years ahead of the Austrian and full fifteen years before hungarian Trade Bill is definitely noteworthy (Niketic, 1923, pp. 147). Serbian Trade Bill strongly drew from the French Code Commerce, especially in articles regarding establishment and day to day functioning of business entities, but also from the Civil Code of the Principality of Serbia (brought about 1844) whose author was Jovan Hadžic (Đorđevic, 2008, pp. 62-84). The very passing of the Trade Bill for the Proncipality of Serbia indicated gradual build-up of political atmosphere which enabled breakthrough of fresh ideas in all aspects of social life. So, for instance, backed by §38 of the Trade Bill, in February 1869 Ministry of Finance issued licence for founding the first private money fund in Serbia. The First Serbian Bank was projected to start with capital of one million ducats. Nevertheless, once opened for business, on the 2nd of October 1869, it turned out that it’s IPO managed to amass only 120,000 ducats (1,440,000 French francs at the time) [Mitrovic, 2004, pp. 33]. As it happened, legislation in the Trade Bill was insufficient for establishment of such complex business entities. Therefore, already in 1871 not only its shareholders went bankrupt, but also its creditors and the state itself - demise having been speeded up by the bank’s attempt to act both as a comercial bank and engage in a purely speculative investment. Bankrupcy of the First Serbian Bank was an important if stressful financial experience for the young Serbian state. The downfall of Prva Srpska bank was an important financial experience for young Serbian State. That is supported by the fact that in 1871 during incorporation of first joint-stock banks with domestic capital (Beogradski kreditni zavod, Smederevska kreditna banka i Pozarevacka banka) the State decided to enact special decrees, specifying their activities, as well as their rights and responsibilities. Given that in number of existing provisions of Serbian commercial law relating to incorporation of public companies (31-38, 41 and 44) there had been no provisions sanctioning unconscionable business dealings, it was decided that a special Decree on trading of banks dated 24 September 1871 will in its first provision state that ‘false creation as well as imitation of any document which the mentioned institutions would issue, will be punishable equally as false creation or imitation of public documents. During following years, until creation of Privilegovana Narodna banka 1884, apart from the mentioned three, only four additional (mainly local) banks were formed with the total founding capital of modest 3.2 million dinars. On the other hand, until the beginning of the 1880s, Serbia did not have either a private or a public financial institution for poorest classes of tradesmen and craftsmen. The only source of loan capital was loanshark capital from rich city tradesmen and high public servants. As well as Serbian peasants, small tradesmen and craftsmen used to paid yearly interest to loansharks between 24% and 50%, with lower amounts on short term carrying a yearly interest of up to 120%. The Serbian authorities on number of occasions attempted to create publicly managed funds to address the issues of lending and loansharking, mostly without success. The more serious attempt of the State to secure lending capital for public was the creation of the Funds Directorate at the Ministry of Finance, in 1862 commencing with work in 1864. Funds Directorate provided long term loans with 6% annual interest by taking a mortgage over up to 50% of estimated value of immovable property. Tradesmen and craftsmen could grant a mortgage over their houses and land, which meant that loans were available only to relatively better off tradesmen and public servants. Newspaper “Belgrade Daily” (“Beogradski dnevnik”) wrote in 1882: “It is known to every Belgrader that money is very scarce. however, our people, as everywhere else, often need money. What happens? Richer tradesmen and capitalists easily help themselves, as in case of need, on their land and on their signatures, they secure money with moderate interest. What happens when a poorer tradesman, craftsman or a public servant gets into the financial need? What? Let’s be honest and say the truth: less well-off class can only turn to loansharks, who, seeing him in the need, fleece his skin off, charging 20, 30, 40, often 50% interest. What is the consequence of that? That class becomes overindebted and goes under” (Aleksic, 2012, pp. 108-133).

Twelve years into transition process, Serbia doesn’t have consistent, if any, let alone coherent economic development policy. This review is therefore aimed at Serbian (and alike transition countries’) policy-makers and stake-holders in an effort to distill the ever-green lessons available (thus far pretty much ignored) to be drawn from the relevant body of theoretical and empirical literature on development economics synthesized since the lifting of the “Iron Curtain”. Starting with boomerang effect of benignly neglected development in favour of mirage-growth, article tackles heretical third path paradigm, empirically (un)confirmed growth determinants, hush-hush impact of inherited time- and scale dependence of potential growth, (i)relevance of human development index, state vs. market correction, trade liberalisation and openness fables, as well as some monetary symptoms of underdevelopment. The sole purpose of this policy paper is one last attempt to debunk a knot of development myths and misconceptions still firmly entrenched in Serbian professional discourse, its policy-makers and regime’s academicians alike.

Objective of this paper is to empirically examine whether widespread unofficial dollarisation plays significant role in determination of exchange rate dynamic in Turkey and Serbia, as one big and one small of the EU candidate countries under managed floating currency regime and synthesize consequent policy recommendations. Our time-series approach utilised monthly data from 2006-2016 to research the aforementioned relationship. After resolving non-stationarity issues, we deployed GARCH analysis to pinpoint the sources of volatility. Our research shows that in Serbia dollarisation has significant and robustly positive influence on exchange rate levels, but not so in Turkey, whose national currency is pretty robust in levels yet its volatility is more sensitive than Serbian dinar to volatility of dollarisation. In addition, Serbian foreign exchange reserves share in the money supply positively influences dinar-euro nominal exchange rate volatility, while Turkish reserves' share in money supply has negative impact on exchange rate volatility. Even though uncovered interest parity doesn't hold in either of countries, Serbian dinar is somewhat susceptible to interest rate manipulation, unlike Turkish lira. In the end, one could conclude that flexible exchange rate has more sense and better results in Turkey than in Serbia, but rational choice between earlier-agreed upon or unilateral-official dollarisation on the one hand and continuing with managed (systematic) floating on the other in these two EU candidate countries, requires additional, more precise cost-benefit analysis, as formalised in the discussion and suggested for future research.

The paper analyses the impact of accession of Croatia, Bosnia and Herzegovina’s traditionally most important regional trading partner, to the European Union on the trade exchange volume and foreign trade orientation of BIH. Although the SAA offered BIH “on paper” a more liberal and favouringly asymmetrical trade approach in relation to the CEFTA 2006 Agreement valid until Croatia’s accession to the EU, especially in the segment of the agricultural production circulation, the statistical data on mutual trade show unambiguous and significant reduction in the volume of foreign trade, more pronounced in BIH export, particularly in the trade of agricultural products. This confirms once again that only several classes of non-tariff barriers have a decisive influence on at least a short-term negative bilateral trade impact of Croatia’s accession to the EU, which BIH tries to compensate by increasing exports to other traditional partners, first Italy and Germany (segment of industrial products in a timely manner focused on the EU core), but also Serbia and Turkey (less pickyand in favour of markets). Since much milder decline in imports of BIH from Croatia is not accompanied by a significant comparative increase in direct foreign investments from Croatia to BIH, the volume of bilateral trade exchange could be increased in medium-term manner either by fulfilling different standards, certificates of compliance and certification laid down in the EU (which would result in an increase in BIH exports) or by a possible incorporation of concessions that Croatia enjoyed within the CEFTA 2006 in the SAA with BIH (which would result in an increase in BIH imports).

The purpose of this paper is to challenge couple of dangerous theoretical misconceptions in open‐economy macro, namely, in respect to desirability or sustainability of available exchange rate regimes and inflation targeting framework and their mutual compatibility in small open economies with incomplete (emerging) markets. First of all, we dismiss the ruling »two corner solution« as dogma in scientific disguise. Furthermore, all the benefits of more flexible intermediate regimes (sliding currency bands) as well as empirical support of their wellbeing have been put forward. As to the monetary policies, majority of transition countries recognised superiority of inflation targeting over alternative monetary concepts. However, until very recently some emerging market economies failed to realize the benefits of full‐fledged ‐let alone flexible‐ inflation targeting. In what follows, the article counters another theoretical dogma: that inflation targeting in emerging market economies must go hand in hand with fully flexible exchange rate regime. Having said that, and again contrary to the mainstream literature in the field, paper exposes some serious weaknesses of the so‐called dirty (or managed) floating as an intermediate regime: in particular, its potential sub optimality in practice and its hidden incompatibility with widespread inflation targeting strategies. Paper concludes by reiterating the inevitability of close relationship between inflation targeting and exchange rate targeting and hence suggests several possible reaction functions for the monetary authorities in emerging markets among those already laid out in the related literature.