Whither Lithuanian economy? Balanced outcome of its progresses and regresses

Abstract

Market economy is a mighty and well-proven accelerator of any economic development. Independence of Lithuania and its transition to a market economy provided the basis for such accelerating development of this country. Therefore, after regaining of independence, it was commonly expected that such a long-term, mighty and accelerating economic grow will be the leading trend in the development of our country. This belief was especially intensified by common contrasting of the new market economy with the old planed one. The transition of the country from the planed to market economy has been seen as the transition from stagnation and poverty to impetuous, active, multisided, persistent, long-term economic grow and lasting wealth. The report analysis data representing the long – term trends in Lithuanian economy and shows that there is no ground to continue holding this view and that the opposite conception of long – term stagnation is much more appropriate characteristic of this economy. It is shown that the prevailing belief in the long-term grow of country’s economy distorts general perception of economical processes in this country. It produces the one-side view, according to which all positive, rising fluctuations are seen as manifestations of the long- term grow and all negative, drop fluctuation – as incidental short time events. The role of this distorted view on country’s development in causing non-realistic economic expectations and, what follows, irresponsible investment policy has been discussed.