Analysis of the EU’s regional economies
Economic Annals-XXI: Volume 128, Issue 3-4(2), Pages: 13-16
Citation information:
Moldenhauer, N. (2013). Analysis of the EU’s regional economies. Economic Annals-XXI, 3-4(2), 13-16. https://ea21journal.world/index.php/ea-v128-04/
Nikolay Moldenhauer
Doctoral Student of Regional Economy and Economic Policy,
Baltic International Academy, Riga, Latvia
nikolaj.moldenhauer@gmail.com
Analysis of the EU’s regional economies imbalance
Abstract. In this article the author analyzes the imbalance of regional economies on the example of the European Union NUTS 1. The purpose of this article is to identify the existing imbalance and to offer recommendations for its elimination. This imbalance is based on the orientation in a market economy. The existing scientific theory put forward two main directions in the market economy: relationship-based and arm’s-length. The studied regions were grouped and selected on the basis of macro-economic indicators to determine their market orientation. As these indicators are: the market capitalization of listed companies (% of GDP), stocks traded total value (% of GDP), domestic credit to private sector (% of GDP) and domestic credit provided by the banking sector (% of GDP). Sampling and group data by region NUTS 1 is based on the maximum values of each indicator. As a result, five regions were selected for each indicator. Based on the data the author concludes that there is an imbalance and there are proposals to eliminate it. Solution of a problem the author is seen in the use of bonds as a financial instrument that will make a bridge between two directions for the development of a market economy. This assumption is based on the nature of the bond that being debt paper, in other words the loan is traded as a financial instrument in the stock market. Thus, a systems approach from the government, using the bonds will merge the two directions. As a means of using bonds author makes several assumptions. First, to use the state bonds to finance certain regions or other government structures. Second, to use the bonds in the private sector through the mediation of banks, which will lead to greater interaction of the two directions in the development of a market economy. Third, to use the special agencies for the dissemination of the bonds, which will lead to the creation of a new sub-industry in the state.
Keywords: Relationship-Based Economy; Arm’s-Length Economy; Risk; Market Capitalization; Stock; Domestic Credit
JEL Classification: E20; E63; F21; F29; F36; G15; G19
References
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Retrieved from http://www.mirkin.ru/_docs/Rub_evolfin.pdf (in Russ.) - Demirguc-Kunt, A., & Levine, R. (1999, July). Bank-based and market-based financial systems: cross-country comparisons. World Bank Policy Working Paper, 2143.
Retrieved from http://elibrary.worldbank.org/content/workingpaper/10.1596/1813-9450-2143 - Rajan, R., & Zingales, L. (2003, March). Banks and markets: the changing character of European finance. National Bureau of Economic Research Working Paper 9596.
Retrieved from http://www.nber.org/papers/w9595 - World Bank (2012). Bushfire resources: Market capitalization of listed companies (% of GDP).
Retrieved from http://data.worldbank.org/indicator/CM.MKT.LCAP.GD.ZS - World Bank (2012). Bushfire resources: Stocks traded, total value (% of GDP).
Retrieved from http://data.worldbank.org/indicator/CM.MKT.TRAD.GD.ZS - World Bank (2012). Bushfire resources: Domestic credit to private sector (% of GDP).
Retrieved from http://data.worldbank.org/indicator/FS.AST.PRVT.GD.ZS - World Bank (2012). Bushfire resources: Domestic credit provided by banking sector (% of GDP).
Retrieved from http://data.worldbank.org/indicator/FS.AST.DOMS.GD.ZS
Received 22.03.2013