Rritje apo Zhvillnim ekonomik
A neoclassical analysis of the Albanian Growth Patterns

Summary/Abstract: The years of transition has created a Growth pattern for Albania. After a sharp decline of the output during the first years of the transition the, following the extend of the private sector the GDP growth showed a good performance in the coming years. The policy makers in Albania are focused to develop strategies that can sustain the positive rate of growth experienced in the last decade. An analysis of the sources of economic growth could help us to understand better the factor that can create sustainability in growth patterns. The aim of the paper presented is to identify the factors that had contribute in the high rate of GDP growth in Albania in a neoclassical approach. By decomposing the sources of growth we can understand that the most significant determinant of growth are physical and human capital accumulation. The key finding of the paper is that the case of Albania the engine of growth has been the high rate of growth of TPF (Total Factor Productivity). The evidence from Albania suggests that growth during the past decade has been driven primarily by reallocation of the resources that occurs in the aftermath of transition. This has been made possible by the fact that Albania was swift in achieving macroeconomic stabilization and moved to liberalize prices and external trade, to privatize agriculture and SME after transition. To further boost the growth is needed to maintain macroeconomic stability, to improve the investment climate, to remove the obstacles to competitiveness and to mobilize resources of essential public investments.

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