Open AccessINVESTMENTS EFFICIENCY AND ECONOMIC GROWTH: A COMPARATIVE ANALYSIS OF NORTH MACEDONIA AND ALBANIA
Author(s) -
Jeton Mazllami,
Brikend Aziri
Publication year - 2019
Publication title -
knowledge
Language(s) - English
Resource type - Journals
eISSN - 2545-4439
pISSN - 1857-923X
DOI - 10.35120/kij31051381m
Subject(s) - economics , investment (military) , macro , pillar , capital (architecture) , economic system , sign (mathematics) , point (geometry) , european union , politics , macroeconomics , economy , economic policy , political science , mathematical analysis , mathematics , structural engineering , archaeology , computer science , law , history , programming language , engineering , geometry
The Western Balkan countries have undergone quite a difficult and process of transition; although for some of them transition seems to be a never-ending process. In their trip towards the European Union these countries are faced with almost identical economic, social and political problems. Regardless, the fact remains that the first sign of a stable and prospering national economy, is having appropriate macroeconomic indicators. Seen from a macroeconomic point of view, investments are an important part of the income and expenditures model, in which they are considered an injector factor. On a macro-plan, the theory of investments is based on the multiplayer effects. This makes investments an important pillar for each national economy as well as a major factor contributing to economic growth. The World Bank as a prestigious institution, recommend ICOR as one of the most useful tools for determination of the impact of investment on economic growth. This indicator is also useful when it comes to make country comparisons. Therefore, the Incremental Capital-Output Ratio (ICOR) is used in determining the efficiency of investments in Northern Macedonia and Albania. Our preliminary assumption is that investment efficiency in both countries is low. Therefore, the main rationale behind the paper is to determine whether this assumption is correct or not.