Borce is working as Assistant Professor at the Faculty of Economics at the University of “Ss. Cyril and Methodius”- Skopje in the Department of Economics. Scientific/research field of interest: contemporary macroeconomic theories, economic policy, public finances, public sector economics, public financial management, fiscal transparency and accountability etc. Trenovski has implemented over 20 scientific/research projects, published over 30 publications and was part of many trainings.
DOAJ (DOAJ: Directory of Open Access Journals), Apr 1, 2022
Sustainability of municipal finance implies steady revenue generation. Pinpointing their determin... more Sustainability of municipal finance implies steady revenue generation. Pinpointing their determinants creates the necessary background in their management and policy creation. Great municipal dependence on central government finance remains a serious challenge in the process of fiscal decentralisation. So far, studies have been focusing on the expenditure side, while revenues were treated mostly marginally. A random-effects Generalized Least Squares (GLS) panel regression for the period of 2015–2019 is estimated for targeting revenue determinants of municipalities in North Macedonia. Own and total tax revenues are modelled separately through the impact of capital expenditures, salary expenditures, active transparency index, municipality type, and local government’s ideology. The general results indicate that capital expenditure, municipal transparency, and the level of development are significant determinants of municipal revenues in both estimated models. Using such knowledge on municipal revenue reactions can help governments formulate policies that provide sustainable and effective fiscal decentralisation, lowering the pressure on central governments in developing economies.
Journal of Balkan and Near Eastern Studies, Jan 19, 2023
The research determines the gap (Great Decoupling) between labour productivity and workers’ compe... more The research determines the gap (Great Decoupling) between labour productivity and workers’ compensation in the two blocks of EU countries (Western versus Eastern). The division of countries into two groups provides a basis further to determine whether the previous socio-economic and political evolutionary development of these countries blocks still has a significant impact on the functional distribution of national income, on the extent to which labour productivity growth is transmitted to workers. The results are heterogeneous. In the sample of highly developed Western EU countries where higher levels of labour productivity, as well as high levels of technological development, lead to an increase in labour productivity to be followed by a lower increase in workers’ compensation. On the sample of Eastern EU countries, results indicate different relationships and the strength of causality between productivity and labour compensation. Central-East EU countries had a more positive relationship between real workers’ compensation and labour productivity, compared to the Southeast Europe (Balkan) countries where an increase in workers’ compensation causes a reduction in labour productivity. The results also offer a solid basis for understanding wage/income/productivity relationships d for creating policies for a more efficient distribution of national income.
Proceedings of the international conference "Economic and Business Trends Shaping the Future"
Starting from the mid-1970s, there has been a significant disbalance in labor markets in almost a... more Starting from the mid-1970s, there has been a significant disbalance in labor markets in almost all world economies. The postulates of classical economics that the causality between labor productivity and workers' compensation is positive, and that the increase in marginal labor productivity is followed by a directly proportional increase in workers' compensation, no longer stand on solid foundations. In the last few decades, there has been a significant distortion of the functional distribution of income, especially between labor and capital. The widely held thesis that "a rising tide will lift all boats," implying that increased labor productivity will be equally distributed among workers, is becoming less relevant. The world, especially EU economies notice a significant disruption in the relationship between productivity growth and labor compensation. In the paper, an attempt is made to analyze the state of the labor market in the Republic of North Macedonia, th...
The economic crisis caused by the COVID-19 pandemic has accelerated certain structural changes in... more The economic crisis caused by the COVID-19 pandemic has accelerated certain structural changes in the economy, especially in the labor markets. When analyzing the effects of the COVID-19 pandemic on labor markets, it should be noted that not all countries, industries and professions are equally affected. We are witnessing that most of the highly developed countries have more or less successfully overcome the shocks that appeared on the labor markets, the shutdown of some of the service sectors, the slowdown of the supply chains of raw materials, as well as the acceleration of some of the structural changes in the labor market. However, like any other recession, there are countries in this one that have largely felt the negative consequences of the COVID-19 pandemic, especially in the labor market. In addition, the workers in the so-called shadow economy or informal sector, low-skilled workers, workers who worked in the services sector (especially in the field of personal services), ...
Faculty of Economic-Prilep, University St. Kliment Ohridski”-Bitola, Oct 1, 2019
Recently, many studies and analysis confirmed that the world is at the beginning of a powerful pr... more Recently, many studies and analysis confirmed that the world is at the beginning of a powerful process of transformation that will radically change our lives, ways of working and communicating.The Fourth Industrial Revolution is expected to improve the computerization of manufacturing industry and focuses on equipping the production with high technology. Three main goals of Industry 4.0 could be highlighted as: (1) Reduction of the human factor in manufacturing thus eliminating human errors (2) Achieving high level of manufacturing flexibility and creating conditions for designing products that meet the specific requirements of the consumer. (3) Intensification of the production process.This paper aims to present the main trends in this field, to explain the benefits of technology and digitalization for the global economy as well as to elaborate the importance of preparing different segments of society for effects from the Fourth Industrial Revolution onto the global labor market. This study obtains a panel data of six countries (France, Germany, Italy, Spain, UK and USA) for period between 1985 to 2017. The results have shown thatinformation and communications technology and multifactor productivity are variables whohave significant and positive impact on labor productivity while the variable average hours worked per person employed has a negative impact. Additional analysis of the demographic and socio-economic trends shows that the labor market will experience radical changes in the future.
ABSTRACT This article presents one of the first attempts to explore the relationship between gove... more ABSTRACT This article presents one of the first attempts to explore the relationship between government revenues and government expenditures in six Southeast European countries for the period 1999–2015, employing a bootstrap panel Granger-causality approach, which provides insight into the nature and direction of their relationship in each country. The empirical results indicate a unidirectional relationship from government revenues to government expenditures in five countries (Albania, Bulgaria, Croatia, Serbia, and Slovenia), confirming the revenue-expenditure or tax-spend hypothesis. The findings offer support for the fiscal synchronization hypothesis only in Macedonia, where bidirectional causality between government revenues and government expenditures was found.
ABSTRACT In this article, we use a recursive VAR model to study the macroeconomic effects of fisc... more ABSTRACT In this article, we use a recursive VAR model to study the macroeconomic effects of fiscal and monetary policies in Macedonia as well as their interactions during 2000–2014. The main findings from our empirical investigation are as follows: first, an increase in public expenditure results in lower economic activity, higher public debt and a loss of foreign exchange reserves; second, an increase in the public revenue has positive output effects accompanied by rising prices, higher foreign exchange reserves and a modest reduction in the public debt; third, a rise in the central bank’s interest rate produces conventional adverse effects on economic activity followed by a decline in the price level; fourth, monetary and fiscal policies act as strategic substitutes; and fifth, our estimates of the fiscal multipliers imply non-Keynesian effects of fiscal policy.
Unemployment remains one of the largest issues in the Northeast planning region (NERP) in the Rep... more Unemployment remains one of the largest issues in the Northeast planning region (NERP) in the Republic of Macedonia. The employment rate of 30.3% in the region is well below the national average and unemployment rate of 44% is almost 16 percentage points above the national average, and highest rate compared with the rest of the regions in Macedonia. Thus the issue of unemployment is a strong reason and an incentive to analyze in-depth: what are the characteristics of the labor supply among young people - unemployed, in terms of demand; what are the constraints of the labor supply versus demand; what policies / reforms / actions are appropriate for resolving potential gaps between the labor market supply and demand etc. This research revealed a number of interesting characteristics of labor demand/supply - that the business sector, especially in NEPR requires a workforce with skills and knowledge in order to carry out specific working tasks and higher education, focusing on the posse...
Research purpose. The purpose of this paper is to examine the efficiency of the transmission mech... more Research purpose. The purpose of this paper is to examine the efficiency of the transmission mechanism of the monetary policy in a banking system with excess liquidity. More specifically, it aims to examine how the interest rates of the central bank bills and inflation rate affect total lending and the overall economic activity in the country. For this purpose, the analysis is based on the case of the Republic of North Macedonia, whose banking system has exhibited excess liquidity in the past decade. Design / Methodology / Approach. The paper is based on two different VECM models, analyzing the impact of the central bank bills interest rates and the inflation rate, on lending and real GDP in the Republic of North Macedonia, for the period 2000 – 2019. The analysis also encompasses unit root tests for the variables of interest in order to determine their order of integration and choose appropriate statistical methods. The short-run causality is assessed using the Granger causality te...
DOAJ (DOAJ: Directory of Open Access Journals), Apr 1, 2022
Sustainability of municipal finance implies steady revenue generation. Pinpointing their determin... more Sustainability of municipal finance implies steady revenue generation. Pinpointing their determinants creates the necessary background in their management and policy creation. Great municipal dependence on central government finance remains a serious challenge in the process of fiscal decentralisation. So far, studies have been focusing on the expenditure side, while revenues were treated mostly marginally. A random-effects Generalized Least Squares (GLS) panel regression for the period of 2015–2019 is estimated for targeting revenue determinants of municipalities in North Macedonia. Own and total tax revenues are modelled separately through the impact of capital expenditures, salary expenditures, active transparency index, municipality type, and local government’s ideology. The general results indicate that capital expenditure, municipal transparency, and the level of development are significant determinants of municipal revenues in both estimated models. Using such knowledge on municipal revenue reactions can help governments formulate policies that provide sustainable and effective fiscal decentralisation, lowering the pressure on central governments in developing economies.
Journal of Balkan and Near Eastern Studies, Jan 19, 2023
The research determines the gap (Great Decoupling) between labour productivity and workers’ compe... more The research determines the gap (Great Decoupling) between labour productivity and workers’ compensation in the two blocks of EU countries (Western versus Eastern). The division of countries into two groups provides a basis further to determine whether the previous socio-economic and political evolutionary development of these countries blocks still has a significant impact on the functional distribution of national income, on the extent to which labour productivity growth is transmitted to workers. The results are heterogeneous. In the sample of highly developed Western EU countries where higher levels of labour productivity, as well as high levels of technological development, lead to an increase in labour productivity to be followed by a lower increase in workers’ compensation. On the sample of Eastern EU countries, results indicate different relationships and the strength of causality between productivity and labour compensation. Central-East EU countries had a more positive relationship between real workers’ compensation and labour productivity, compared to the Southeast Europe (Balkan) countries where an increase in workers’ compensation causes a reduction in labour productivity. The results also offer a solid basis for understanding wage/income/productivity relationships d for creating policies for a more efficient distribution of national income.
Proceedings of the international conference "Economic and Business Trends Shaping the Future"
Starting from the mid-1970s, there has been a significant disbalance in labor markets in almost a... more Starting from the mid-1970s, there has been a significant disbalance in labor markets in almost all world economies. The postulates of classical economics that the causality between labor productivity and workers' compensation is positive, and that the increase in marginal labor productivity is followed by a directly proportional increase in workers' compensation, no longer stand on solid foundations. In the last few decades, there has been a significant distortion of the functional distribution of income, especially between labor and capital. The widely held thesis that "a rising tide will lift all boats," implying that increased labor productivity will be equally distributed among workers, is becoming less relevant. The world, especially EU economies notice a significant disruption in the relationship between productivity growth and labor compensation. In the paper, an attempt is made to analyze the state of the labor market in the Republic of North Macedonia, th...
The economic crisis caused by the COVID-19 pandemic has accelerated certain structural changes in... more The economic crisis caused by the COVID-19 pandemic has accelerated certain structural changes in the economy, especially in the labor markets. When analyzing the effects of the COVID-19 pandemic on labor markets, it should be noted that not all countries, industries and professions are equally affected. We are witnessing that most of the highly developed countries have more or less successfully overcome the shocks that appeared on the labor markets, the shutdown of some of the service sectors, the slowdown of the supply chains of raw materials, as well as the acceleration of some of the structural changes in the labor market. However, like any other recession, there are countries in this one that have largely felt the negative consequences of the COVID-19 pandemic, especially in the labor market. In addition, the workers in the so-called shadow economy or informal sector, low-skilled workers, workers who worked in the services sector (especially in the field of personal services), ...
Faculty of Economic-Prilep, University St. Kliment Ohridski”-Bitola, Oct 1, 2019
Recently, many studies and analysis confirmed that the world is at the beginning of a powerful pr... more Recently, many studies and analysis confirmed that the world is at the beginning of a powerful process of transformation that will radically change our lives, ways of working and communicating.The Fourth Industrial Revolution is expected to improve the computerization of manufacturing industry and focuses on equipping the production with high technology. Three main goals of Industry 4.0 could be highlighted as: (1) Reduction of the human factor in manufacturing thus eliminating human errors (2) Achieving high level of manufacturing flexibility and creating conditions for designing products that meet the specific requirements of the consumer. (3) Intensification of the production process.This paper aims to present the main trends in this field, to explain the benefits of technology and digitalization for the global economy as well as to elaborate the importance of preparing different segments of society for effects from the Fourth Industrial Revolution onto the global labor market. This study obtains a panel data of six countries (France, Germany, Italy, Spain, UK and USA) for period between 1985 to 2017. The results have shown thatinformation and communications technology and multifactor productivity are variables whohave significant and positive impact on labor productivity while the variable average hours worked per person employed has a negative impact. Additional analysis of the demographic and socio-economic trends shows that the labor market will experience radical changes in the future.
ABSTRACT This article presents one of the first attempts to explore the relationship between gove... more ABSTRACT This article presents one of the first attempts to explore the relationship between government revenues and government expenditures in six Southeast European countries for the period 1999–2015, employing a bootstrap panel Granger-causality approach, which provides insight into the nature and direction of their relationship in each country. The empirical results indicate a unidirectional relationship from government revenues to government expenditures in five countries (Albania, Bulgaria, Croatia, Serbia, and Slovenia), confirming the revenue-expenditure or tax-spend hypothesis. The findings offer support for the fiscal synchronization hypothesis only in Macedonia, where bidirectional causality between government revenues and government expenditures was found.
ABSTRACT In this article, we use a recursive VAR model to study the macroeconomic effects of fisc... more ABSTRACT In this article, we use a recursive VAR model to study the macroeconomic effects of fiscal and monetary policies in Macedonia as well as their interactions during 2000–2014. The main findings from our empirical investigation are as follows: first, an increase in public expenditure results in lower economic activity, higher public debt and a loss of foreign exchange reserves; second, an increase in the public revenue has positive output effects accompanied by rising prices, higher foreign exchange reserves and a modest reduction in the public debt; third, a rise in the central bank’s interest rate produces conventional adverse effects on economic activity followed by a decline in the price level; fourth, monetary and fiscal policies act as strategic substitutes; and fifth, our estimates of the fiscal multipliers imply non-Keynesian effects of fiscal policy.
Unemployment remains one of the largest issues in the Northeast planning region (NERP) in the Rep... more Unemployment remains one of the largest issues in the Northeast planning region (NERP) in the Republic of Macedonia. The employment rate of 30.3% in the region is well below the national average and unemployment rate of 44% is almost 16 percentage points above the national average, and highest rate compared with the rest of the regions in Macedonia. Thus the issue of unemployment is a strong reason and an incentive to analyze in-depth: what are the characteristics of the labor supply among young people - unemployed, in terms of demand; what are the constraints of the labor supply versus demand; what policies / reforms / actions are appropriate for resolving potential gaps between the labor market supply and demand etc. This research revealed a number of interesting characteristics of labor demand/supply - that the business sector, especially in NEPR requires a workforce with skills and knowledge in order to carry out specific working tasks and higher education, focusing on the posse...
Research purpose. The purpose of this paper is to examine the efficiency of the transmission mech... more Research purpose. The purpose of this paper is to examine the efficiency of the transmission mechanism of the monetary policy in a banking system with excess liquidity. More specifically, it aims to examine how the interest rates of the central bank bills and inflation rate affect total lending and the overall economic activity in the country. For this purpose, the analysis is based on the case of the Republic of North Macedonia, whose banking system has exhibited excess liquidity in the past decade. Design / Methodology / Approach. The paper is based on two different VECM models, analyzing the impact of the central bank bills interest rates and the inflation rate, on lending and real GDP in the Republic of North Macedonia, for the period 2000 – 2019. The analysis also encompasses unit root tests for the variables of interest in order to determine their order of integration and choose appropriate statistical methods. The short-run causality is assessed using the Granger causality te...
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