Issue 8, 2023

The aim of our article is to quantify the impacts of COVID-19 disease on four basic aggregate economic indicators, which are set in Kaldor's magic square in EU member countries in the year 2020, as well as to identify changes in the area of the square compared to the five-year average. The result of our article is the finding that, compared to the five-year average, the area of the magic square decreased by more than 15% in 2020 from the point of view of the entire EU. The drop in real GDP in 2020 is particularly significant. There is a general economic decline and economic recession in the EU, with significant disparities between individual countries. However, there is also one member country, Lithuania, which managed to increase the area of the magic square in 2020 compared to its five-year average.
Keywords: EU; COVID-19; magic square; GDP; balance of payments; HICP; unemployment
JEL: E66; F63; O11; O52

The objective of this research is to perform an empirical analysis of the nexuses between real per capita output growth, income disparity and greenhouse gases in Bulgaria. To accomplish this goal, the original and the environmental Kuznets curves for Bulgaria were constructed. The results from the study indicate that in Bulgaria social resilience declines as economic sustainability increases. This demands tax and income policies for alleviating income disparity. It is advisable that progressive income taxation and tax-free minimum income be installed in order to diminish social instability in Bulgaria. Another inference from the empirical investigation is that Bulgaria ought to have a minimum real per capita output growth of 5.8% so that a decrease in carbon emissions is achieved.
Keywords:Sustainability; Kuznets curves; Bulgaria; income disparity; greenhouse gas emissions
JEL: F63; O20; Q01; Q56

Fiscal risk, under the form of unforeseen increases in public expenditures, can be quantified by the (increasing) government debt level. This study aims to identify the interdependencies between government debt, the number of people active on the labour market (labour force), the level of the average salary in the economy, the harmonized index of consumer prices and the RON-EURO exchange rate. The main objective is thus to assess which ones of the last four variables influence in the short and long run the government debt and constitute a fiscal risk. The analysis is focused on Romania, using quarterly data starting from the 1st quarter of the year 2000 and up to the 2nd quarter of 2021, the applied methodology being VECM. The most important conclusions show that changes in the level of the average salary and active population are significant and influence the government debt both in the short and long run and they can constitute in this regard fiscal risk determinants, while HICP as an inflation indicator or HICP do not exert significant impact on government debt either on short term or long term. While the average salary constantly exerts a significant and positive influence on the government debt, the change in the active population leads to a change of the same sign in the government debt in the short term, but of the opposite sign in the long term. The main recommendation for the government that derives from the results of the study is to implement measures to increase the active population and increase the degree of employment, in order to decrease the pressure on the government debt and fiscal risks, both in the short term and long-term. This is in line with the results of numerous studies that show that the decrease in the active population, combined with the rise in retired people, lead to increasing indebtedness.
Keywords: fiscal risk; government debt; demographic tendencies; average salary
JEL: H63; J01; H50

It is already known that performance management represents a set of processes and practices of human resource management, i.e. activities that aim to achieve the goals of the organization in the best possible way. In fact, there are numerous studies which are dedicated to the performance management process, showing that this process is now not only applicable in various organizations, but is also the object of analysis to improve it ongoing. Moreover, in organizations in Kosovo, there has been a lack of studies about this process over the years. Previous research has proven that the human factor is one of the key components of a successful organization. As a result, good human resource management with special emphasis on performance management practices and processes can be considered as a successful way to achieve the objectives that the organization aims. Therefore, the main objective of this paper focuses on performance management which is measured through human resource management practices and processes, defining the success or failure of the organizations in Kosovo. Thus, for the realization of this paper, we conducted a survey through a questionnaire that we distributed to employees and managers of organizations throughout the territory of Kosovo. The findings have shown that recruitment and selection, performance appraisal, training, reward system and career development are important factors in the performance of the enterprise. Considering these factors and their importance, the study provides recommendations and suggestions for improving these processes and human resource management practices for the researched organizations and broader.
Keywords: Performance management; human resources; processes; practices; development
JEL: O15; J53

The main aim of the paper is to investigate the effect of macroeconomic stability on economic growth in North Macedonia by applying ARDL econometric model and by using quarterly data for the period from the first quarter of 2007 to the fourth quarter of 2022. We divide the concept of macroeconomic stability into four sub-concepts – output stability, price stability, fiscal stability and financial stability – and find suitable proxies for each of them. In addition, we add a few growth drivers as control variables. The estimated results indicate that higher GDP volatility has a negative effect on economic growth at one level, but weaker and positive effects at one lag; inflation volatility and budget balance volatility have no effect on GDP growth; and capital adequacy ratio negatively impacts GDP growth. Furthermore, we find that the levels of financial intermediation and indebtedness negatively impact the growth of the Macedonian economy.
Keywords: macroeconomic stability; economic growth; ARDL model
JEL: E31; E32; E44; O40

In the current paper, we aim to examine the Shadow Banking System (SBS) in a number of developed countries, more precisely nine countries from Europe and the United States for the period 2002-2018. The goal is to define which are the key determinants that drive the SB processes. To this end, we run simple robust panel estimations. As a result of this analysis, we have reached a number of conclusions: 1/ the roles of banks, insurance companies and pension funds are important, 2/ changes in banking variables, such as the capital ratios, lead to an increase in shadow banking activity, 3/ there is a negative relation between banking interest margins and shadow banks, and  4/ developments on the stock market affect shadow banking positively. However, given the limitations in terms of data size and evolving definitions, our findings are not generalizable. Our main recommendation is to develop a more granular and reliable approach to improve the quality of empirical research and reduce the literature gap. 
Keywords: Shadow Banking System; Robust panel estimations; macro-prudential policy.
JEL: C1; E5; G2

This work is dedicated to the definitions of control introduced by the Conceptual Framework for Financial Reporting which defines assets recognition based on the understanding that assets are an economic resource and as such a bundle of rights. The concept of assets recognition based on the relationship with the provisions of property law is analysed and on this basis, the reporting, presentation and disclosure of the right-of-use assets in the financial statements of Bulgarian companies for 2021 are studied.
Keywords: Conceptual Framework; lease; right-of-use asset; lease liability; presentation and disclosure of leases
JEL: M41

The partnership between universities and businesses, the transfer of scientific products created in higher education institutions and used in entrepreneurial practice is a source of innovation in a turbulent and highly unpredictable environment. This cooperation provides indisputable benefits not only for scientific and business organisations, but also for the economy and society as a whole. This, as expected, causes significant interest among researchers, as well as national and international institutions. Despite the scientific activity and the emphasized interest, there is a need for additional knowledge regarding the scope and extent of the use of scientific products created by academia, analysed and evaluated through the prism of entrepreneurs. The aim of this paper is to identify whether enterprises’ size and sector affiliation influence the use of university research products in entrepreneurial practice, investigating the companies’ perspective. Therefore 904 companies, operating in Bulgaria, were surveyed through a structured questionnaire. The methods for analysing the empirical data combine exploratory data analysis and confirmatory data analysis, in which the tools of diagrammatic images and contingency tables were used. The results show that as the size of enterprises increases, the use of research products does too, while at the same time, entrepreneurs’ assessment of the need to establish partnerships with universities has a non-linear relation to the size of the enterprise. In addition, smaller businesses were found to be targeting university research products presented in publicly available forms while bigger ones are looking for interactive ways of knowledge transfer. Along with the size of the enterprises, it was found that their economic sector affiliation affects the intensity of cooperation with the academia highlighting as leading the sectors related to knowledge-based services, contrary to the prevailing perception that manufacturing and ITC sectors occupy leading positions.
Keywords: entrepreneurship, university-business cooperation, scientific products, knowledge transfer, SMEs
JEL: L14, L25, L26, O33, O36

Information and communication technologies have moved us from an industrialized society to an information society, driven and regulated by the information content. The content of the website, the automation and robotisation as technologies used by hospitality organizations have become necessary conditions, providing a warranty that the company will be recognized on one hand. Tourism and hospitality are industries that have been most significantly affected by the information age in which we live. Due to digitization, the tourist has the opportunity to obtain preliminary information about the given destination, to take a virtual tour and to create expectations about the future destination he/she plans to visit. The digital technologies also support and help the tourist in the preplanning, planning stage as well during the trip and after it. In other words, the digitalization of tourism facilitates and contributes to the quality service of tourists. The current paper addresses the essence of digitalization through application of the artificial intelligence in the example of tourism and hospitality. What is more, it discussed how the digitalization can impact on the tourism industry. Best practices for the application of digitization in the sphere of hospitality and tourism have been also presented in the current paper.
Keywords: digitization; robots; artificial intelligence; chatbots; travel blogs; AI; hospitality robots; emotional intelligence; digital maturity
JEL: L83

Over the past few years, artificial intelligence (AI) and machine learning (ML) have become increasingly important in central banks’ policy-making and monetary policy-making processes. The global financial crisis of 2008-2009, the COVID-19 pandemic, as well as various other episodes of high economic uncertainty since the turn of the millennium have adjusted central banks to a number of serious challenges and have led to the expansion of these mandates and emerging and exploiting new and extensive data. The study briefly notes on this as a big database (big data) and applications of AI/ML-based techniques that can provide support on monetary policy decisions, especially during times of uncertainty in the economy, referring to the latest research in this area. Also, concrete examples based on the creation of big data and AI/ML techniques applied in the activities of the European Central Bank and other central banks in Europe and the rest of the world are considered and analyzed. The analysis reveals that big data and AI/ML methods have demonstrated successful utility in conducting monetary policy by central banks. Although useful as a complement, these tools cannot be regarded as replacements for conventional data and methods due to issues related to statistics, the ability to interpret outcomes and ethical dilemmas.
Keywords: artificial intelligence; big data; machine learning; central banks; monetary policy; economic uncertainty
JEL: E52; E58; D81; C55