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The Park Place Economist

Abstract

Transitioning economies are special occurrences, which often contribute to their significance and need for analysis. The purpose of this study is to assess the determinants of economic growth in the recently independent transitional economies of the former Yugoslavia while using Slovenia as the main comparison country. Slovenia is deemed throughout the literature as the most successful state after transition, which is why it is used as the main comparison state. The countries included in this study are Slovenia, Croatia, Serbia, Bosnia and Herzegovina, Macedonia, and Montenegro. Kosovo has been excluded due to the instability created by its recent independence and its involvement in the Kosovo War. The time range of this study is from 2000 to 2011 due to the limited availability of data for all the countries since they are recently independent and the data is from the World Bank Database.

This study will first establish background knowledge of the Yugoslav region in order to set the stage and explain where economic growth was apparent before independence. Then, literature on the most successful state, Slovenia, will be discussed as well as the relevant information on the statuses of each country prior to the transitioning period. This study adds to the overall literature about the former Yugoslavian countries by examining the components of economic growth to Gross Domestic Product (GDP) per capita growth. After the theory section, the data and methodology sections state the two methodologies used: descriptive statistics and means hypothesis testing to determine what factors are simliar to Slovenia’s means. Results and discussion will conclude the study where Slovenia is ranked highest in terms of future success with Croatia and Serbia following in second and third.

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