Mačys, Gediminas

The paper deals with the driving factors shaping the gross mean wage (GMW) and her rigidity in Lithuania. The current paper is a first in series “Wage-led growth” and it reminds briefly the basics of well-known and popular approach on wage-led economic growth. The calculations are performed over a sample of ten years. The paper presents the regressive analysis of GMW driving factors. The analysis confirmed an existence of strong, linear relationship between the GMW and three driving factors, namely the unemployment rate, social disbursement expenditures and national GDP. This kind of relationship is inherent in the considerably exportsided economies of small countries like a Lithuania. Furthermore, the well-known multinomial logit model of GMW rigidity has been applied in current research. The analysis found a strong rigidity of the GMW and even the stiffening of rigidity over past few years in Lithuania. The defined wage rigidity can be perceived as a binding constraint on wage setting for large segments of the work force in a low inflation environment like in a Lithuania during present period. The corresponding upward pressure on wages of last year was caused by the decline in unemployment and seems to be a result of strongly improved job market position of employees in Lithuania. A shift in the bargaining power of the employers to the employees was found too. The current paper suggests softening the real wage rigidity, gaining strength the foreign direct investments, internal consumption and youthfulness of nation. It would bring a positive pressure to increase the incomes per capita and raise a well-being of Lithuanian people in the next future.

A number of recent investigations on innovations and economic growth have been performed in Mykolas Romeris University in Lithuania. They are investigating a large scope of innovative activities from the gross domestic expenditure on R&D and learning capacities up to the final innovative production in Baltic countries and especially in Lithuania, including the original theoretical approach and model. The present paper is a first introductory in series “The innovations and economic growth” and surveys the empirical evidence on the link between innovation and economic growth. It considers a number of different measures of innovation, such as R&D spending. The dynamic structure of high-tech commodities export has been analysed and presented to make the comparisons of Baltic States. The econometric models on Lithuania have been applied and linear regressive relation between the R&D spending and innovative export has been discussed. The main conclusions and suggestions for practice are presented.

A new race for global economic advantage is under way. It is a fierce race that only the most innovative nations will win. The first paper in series “The innovation and economic growth” has clearly denoted the leader role of Estonia in raising the investments in R&D sector and boosting their innovative export-oriented production. The present paper is a second in series and presents a nonlinear regressive analysis of whole chain of innovation driving factors, starting from the investments in R&D and leading up to the boost of innovative export-oriented production in Estonia. The dynamic structures and time-series of outstanding driving factors are presented to disclose the Estonian leadership in Baltic States. The main conclusions and suggestions are presented. The first conclusion is that a high-tech R&D based innovation matters at the later stages of economic development, when there are barely both factors of competitiveness and learning that allow for completing the “catch-up” processes clearly observed in Estonia. The next is that the present regressive analysis clearly shows that the governmentbacked R&D policies retaining the growing levels of main innovation driving factors are really correct and warrant a high future grow of production in question. Actually the coming level of Estonian innovative exportoriented production was econometrically estimated to grow at 15.2% in 2014 ever after. The practical implication of these findings for companies are that in order to improve performance they must avoid narrowly focusing on R&D, but must invest more in capabilities to commercialize technologies resulting from the R&D. The suggestion to continue the regressive analysis on the grounds of total factor production, product market competition and concentration of the sector, and knowledge diffusion in productivity improvements is on the agenda of forthcoming research.

This paper analyses the crisis and economic recovery in three Baltic countries, Estonia, Latvia and Lithuania. Using macroeconomic data for the three countries over a 12-year period, 2005-2011, the paper examines the factors leading to- and out the crisis, the policy responses to the crisis, an evaluation of their recovery and the lessons that can be learned. The present analysis undoubtedly shows that Estonia has passed the crisis due to excellent readiness with least losses, and it was valued at the admission to the EU Euro countries union. What about other two countries? They have passed the crisis with huge losses. Policymakers in all three countries are now under pressure to act. What after-crisis policy strategies are under choice from a long-term perspective? The paper concludes with an outline of key lessons for policy makers from the experience of the three small countries.

Despite a long-term story of poverty and social exclusion research or political actions, the poverty continues to grow all the time in the big part of the world. The poverty does persist in the big part of EU including the Lithuania too. The paper presents the empirical information about the risk of poverty in EU and Lithuania. The influence of social groups and macro factors on poverty is analyzed. The marked risks at poverty levels of the groups of children and working people have been noticed. The risk at poverty level of retired people is conversely much lesser and clearly declining during the past decade. A new macro-econometric multilevel model for determining the determinants of poverty is developed in the paper. The model enables to check the different premises and structural determinants of poverty dynamics and the efficiency of public policy measures as well. A part of present paper material has been presented in the Conference EIIC-2012 at 3-7 Sept. 2012. A great importance of detailed comparative analysis and numerical modeling were noticed in the conference. The text of present paper is substantially updated and supplemented.

Despite the long-term story of poverty and social exclusion research and political actions, the poverty continues to grow in biggest part of world, including EU countries. Despite the huge sums of money of EU support funds, the poverty does persist and to an impressive extent in biggest part of EU. The states of poverty in Lithuania and in EU as well are outlined in present paper. A special heed to the influence of different social groups and to the different dynamic patterns of these groups is presented in the paper. In defiance of long-term story of analytic research a number of unresolved theoretical problems especially for the integrative framework of micro- and macro acting factors on individual and regional levels of poverty does still persists too. A multilevel regressive model of poverty processes is developed and adapted in Lithuania in present paper. An effect of macro factors such as the territorial dimension, the unemployment rate on the poverty probability, and the impact of individual characteristics such as the education and professional experience level on the risk at poverty are in research agenda of future modelling.

The paper analyses the crisis and recovery in three Baltic countries, Estonia, Latvia and Lithuania. Using macroeconomic data for the three countries over a 12-year period, 2005-2011, the paper examines the factors leading to- and out the crisis, the policy responses to the crisis, an evaluation of their recovery and the lessons that can be learned. Three years after the 2009 recession, the global recovery is faltering. The present analysis undoubtedly shows that Estonia has passed the crisis due to excellent readiness with least losses, and it was valued at the admission to the EU Euro countries union. What about other two countries? They have passed the crisis with huge losses. The policymakers in all three countries are under pressure to act. What after-crisis policy strategies are under choice judging at a long-term perspective? The first and most obvious lesson is that a vulnerability of economy should be avoided. The recession conditions contribute to the economic restructuring through stimulating the business churn, the entry and exit of firms, and by motivating the incumbent firms to adapt products and business processes. The dynamic, innovative new businesses have an important role to play in leading the economy out of recession.