Speech of Anita Angelovska-Bezhoska, Vice Governor of the NBRM, at the launch of the publications “Bibliography of Central-Banking Activities: 1946-2016” and “Research Thought in the NBRM: 1992-2015”, Skopje, 17.10.2016
Dear guests and colleagues,
The celebration of the 70th anniversary of the beginning of central-banking activity in the Republic of Macedonia with this event dedicated to research activities, undoubtedly stresses the role that the research has played in the long process of outlining the National Bank as a highly skilled and professional institution - a pillar of longstanding macroeconomic stability, but also generally stresses the role of research in all aspects of social life.
The research, by its very nature, encourages critical thinking and myriad of ideas, reconsideration of certain conventional wisdom, thus paving the way to further progress. Economic research is a prerequisite for sound macroeconomic policies that increases the long-term potential of economies, aimed at higher level of income and social welfare. In this context, the Nobel laureate Robert Lucas says, "Once one starts to think about long-term growth and economic development, it is hard to think about anything else other than research."
Research has always been an immediate need for the monetary policy makers. The economic and financial crisis brought this need to the fore, and led to a review of some of the basic principles and postulates of monetary theory. In global terms, in the pre-crisis period, we enjoyed the benefits of the period of the so-called "Great Moderation" - solid rates of economic growth and moderate inflation. Yet it was a period of proliferation of imbalances in the financial system. The lesson was clear - price stability is not always a guarantee of financial stability, while financial instability can have long-term effects on the economic growth and inflation. Therefore, the numerous dilemmas in science and central banking are no surprise: are money really neutral in the long run; should the central banks also take into account the financial stability when conducting monetary policy and to what extent, or should it be in the exclusive focus of the macroprudential policy; can the existing monetary strategies and available tools respond to these challenges and so on. Of course, the answer to these fundamental questions is not simple, clearly emphasizing the need for further research and analysis of possibly setting new paradigms in monetary theory, or simply a better understanding of the channels of transmission of monetary policy.
The National Bank of the Republic of Macedonia is an anchor institution in the economy, which through the strategy of stable exchange rate, has been providing price stability for years, which is considered an essential input of the central banks to the economic development. I think there is no doubt about the role of the research for creating stable macroeconomic environment. The need for it has always been clearly recognized and supported by the top management of the Bank. Currently, the development of research activity is one of the strategic objectives of the Bank set in the medium-term strategic plan, a document that presents the strategic objectives, mission and vision of the central bank. The research areas that need to be focal points of the available research resources are clearly defined in our medium-term program of research activity.
Seen from a historical perspective, the results of the research activity of the employees in the National Bank has followed a long and continuous process of investing in the infrastructure necessary for quality research and upgrade of institutional knowledge, strengthening of the research potential in the broadest sense:
- In the past twenty years, we have invested huge efforts to build statistical databases and establish certain types of statistical research as a precondition for every scientifically based research. In fact, statistics is not a goal for itself, but serves the policy makers. Hence, the evolution of challenges they faced imposed new statistical requirements. As the former President of the European Monetary Institute, Alexander Lamfalussy once said, "Nothing is more important for monetary policy than good statistics", in the sense that it is a prerequisite for understanding the state of the economy, but also for fundamental economic research, without which the conduct of economic policies would be nearly impossible.
- Aware of the importance of developing human potential, great attention has always been given to capacity building of employees through high quality training and seminars organized by top international institutions. In fact, some employees became familiar with the principles of the market economy for the first time through these channels of knowledge acquisition. Training in the field of macroeconomics, financial markets, econometrics and modeling, as well as in the field of the use of different econometric software packages have proved imperative for following the modern trends in research worldwide.
- The exchange of experience in the field of research at international workshops and conferences further contributes to strengthening research capacity, expanding research horizons and to the promotion of papers of our researchers.
- The continuous enrichment of the library fund in the Bank provids valuable access to numerous scientific literature and following of the modern trends in central banking and in general, in economic theory and empirical research.
- Investing in human potential, along with the international technical assistance, contributes to the delivery of a number of research projects, where the direct practical cooperation with experienced foreign experts further contributes to the development of our staff’s capacity. An example of such a project is the development of a basic macroeconomic model that incorporates the features of the Macedonian economy – a small and open economy with a fixed exchange regime. The model provides a consistent layout of the fundamental relationships between key variables in the economy, offering a platform for medium-term macroeconomic projections, as one of the key elements of the system of monetary decision-making. The effort of our colleagues was undoubtedly huge, and it is especially heartwarming that the quality of work is recognized, and extremely highly rated by relevant international institutions. Nothing less.
- To promote research activity on a larger scale in Macedonia, in 2011 we established the Club of Researchers, which is an open platform for presentation and discussion of research papers in the field of macroeconomics by researchers from and outside the Bank. The presented research papers tackle a number of key issues, such as the channels of monetary transmission, the factors that form the path of inflation trends, the cyclical nature of fiscal policy, transmission of external shocks, financial stability and so on.
In fact, the publication we launch today, Research Thought in the NBRM: 1992 - 2015, is a testament of the continued and multiple research activities of our present and former colleagues. We should also mention the significant presence and acceptance of these papers internationally. Thus, of 454 papers in total, only 136 papers (31%) have been published abroad, of which about one-third (34%) were published in international journals (most of which with impact factor). In addition, it is worth mentioning the fact that the series of research papers of the National Bank, posted on the web portal of the largest database of economic and financial research IDEAS for several years, has climbed steadily up the list. It has already acquired the impact factor, which given the short series is relatively small, but suggests that our papers are widely read and quoted in the region and worldwide. These figures undoubtedly confirm the quality of research papers of the central bank and are pride for the institution.
We live in times of global reconsideration of many conventional wisdom that will perhaps be replaced with new ones in the foreseeable future. In this context, the interest and importance of the research work has been increasing, and is expected to offer research papers that will help resolve the dilemma facing science and economic policy makers. The challenges facing the Macedonian economy in the convergence process towards higher levels of income create the need for a wide range of research that will enable better understanding of the structural features of the economy, the effects of macroeconomic policies (including the effects of structural policies aimed at encouraging FDI) on growth, inflation and the long-term potential of the economy, a better understanding of the effectiveness of conventional and unconventional monetary measures to stimulate lending activity, the links between the financial and the real sector, but also room to maintain accommodative monetary and fiscal policies.
Aware of the valuableness and necessity of the research, the National Bank will continue its comprehensive support of research activity within the Bank, and beyond, to support the development of scientific research in the country. It is the only way to build a solid base for making sound policies in practice and for achieving the goals and objectives of the central bank. In addition, the further development of research papers, as evidenced by these two publications, adds to the building of the monetary and economic history of a country, which of course will be a legacy for future generations.
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