MODELING THE DETERMINANTS OF EXPORTS AND IMPORTS: ASSESSMENT OF THE MACEDONIAN COMPETITIVE PERFORMANCES

So far Macedonia has undergone an unsuccessful attempt to transition,distinguished by low growth rates, high unemployment, extensive poverty,balance of payments unfavorable position, technological lag etc. The externalsector, as a core element to growth perspectives of a small open economy iscritically dependant upon the export competitiveness. Consequently, thispaper will address some critical points of the Macedonian economy,particularly the vulnerability of the external sector alongside with the priceand trade liberalization. The set of analyses is to be carried out to explore theforeign trade structure, current account developments, as well as the majoraspects of qualitative competitiveness. In addition, we have examined theimpact of macroeconomic variables on exports and imports within theselected timeframe. We have therefore applied a comprehensive approach ofdynamic modeling based upon a vector - autoregression model determinedto control for endogeneity and set to estimate the long - run equilibriumrelations, as well as the short-run dynamics of the key variables