Archive of Journal - Financing

Financing – scientific journal for economy

ISSUE 2018, No. 3, Article 4, Year of publication: 9, September, 2018
The Republic of Srpska Macroecnomic indicators


Saša Stevanović*

*The Republic of Srpska Fiscal Council Board Member



Metastable state (state which is near equilibrium) will become stable if we wait long enough. The stable state depends on historical patterns and shocks. In the equilibrium every agent is satisfied by his position, this state economist calls Nash equilibrium. In which way the Republic of Srpska can achieve equilibrium, is an economy of the Republic of Srpska can be characterized as the economy in equilibrium, how far is current state from equilibrium in which way shocks can positively and negatively influence equilibrium, in which way can we increase economic growth, citizens welfare, and higher income? Answers to those questions depend on the previous and current state of key economic fundamentals and decisions – shocks from policymakers. The subject of this article is macroeconomic aggregates on which the Republic of Srpska can influence directly with a different policy. Research include potential economic growth and potential GDP as an economic indicator for which I believe can help decision-makers who influence short-term adaptation of macroeconomic policy but also to creators of structural reforms with an aim to adapt economy in long-term to sustainable and stable economic growth.

Keywords: Production function, Potential GDP, Fiscal policy, Fiscal sustainability.

DOI: 10.7251/FIN1803031S

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