US economist Paul Krugman, a Nobel Prize laureate, has assessed in Belgrade that the national currency – dinar – is still overrated, and he recommended that the state should support the consumption power of the population.
Serbia has its currency which has been quite devaluated, and on the whole it is not bad, because it increases the competitiveness of the country, Krugman said at the lecture in the Hyatt Hotel. He has pointed that Serbia is in a specific situation, due to not being a member of the EU, but its microeconomic trends are not unlike those in the peripheral European economies. The aggravating circumstance for improving competitiveness is the fact that almost entire foreign debt of the country is nominated in euros, assessed Krugman. If there were not for that debt, you could devaluate dinar and increase the competitiveness, he said. According to Krugman, the events in the economic systems of European countries are largely dependent on the decisions of the European Central Bank and Germany.
Source Balkans