Economy

Economists have been fascinated by the question of the origins of prosperity since the very beginning of their discipline. Today, we know much more about it than Adam Smith did 250 years ago when he wrote The Wealth of Nations. In the mid-20th century, economist Robert Solow developed a model explaining economic growth through capital accumulation and population growth.

I recently attended a discussion on Europe’s competitiveness. There was unanimous agreement that we are lagging behind in all applied technologies—perhaps with the sole exception of the pharmaceutical industry. The reflexive response from the participants was: “We’ve created a fund for that.” Too few startups? Create a startup fund.Weak AI performance? An AI innovation fund!

“Competition is a discovery procedure that enables us to adapt to new circumstances. It is through further competition, not through agreement, that we gradually increase our efficiency.” This statement by economist F.A. Hayek best captures the essence of competition. Competition constantly separates the efficient from the inefficient. The invisible hand of the market is, in fact, the visible hand of the customer.

One of the recommendations of last week\'s IMF mission in Bulgaria is to \"cool down wage growth in the public sector.\" This is not the first time that the IME has commented on the accumulation of risks to fiscal stability as a result of ill-considered decisions to increase spending, and in particular wages in the defense and security sectors over the past year.

In late August 2025, the Institute for Economic Research and Policy Consulting (IER) released the results of its 40th monthly Business Tendency Survey, covering 474 industrial enterprises across Ukraine. The findings paint a picture of cautious optimism in the short term, but deep uncertainty over the longer horizon.

Ukraine has been part of the Trans-European Transport Network (TEN-T) since 2017, when the European Union officially extended it to Eastern Partnership countries. For the first time, Ukrainian roads were included in the TEN-T map as part of a network ensuring strategic connections with EU member states. This became the foundation for integrating Ukrainian infrastructure into the unified European transport space.

Ukraine\'s economy experienced a temporary bump in August 2025, with real GDP growth accelerating to an estimated 8% year-over-year after a slight decline in July, according to the latest Monthly Economic Monitoring report from the Institute for Economic Research and Policy Consulting.

European policymakers and large exporters are increasingly uneasy about the euro’s rise — particularly against the U.S. dollar. But this concern is misplaced. Like arguments for tariffs, it mistakes accounting effects for economic damage. A stronger euro does not weaken Europe; it strengthens it.

The European Union finds itself in a paradoxical situation. The population is ageing, the economy is stagnating, and at the same time, vast sums of citizens\' savings are lying idle in bank deposits. According to the European Commission, 31% of Europeans\' savings are unused in bank accounts. In contrast, Americans put their money to work much more efficiently, keeping three times less cash under the mattress.

The government’s migration strategy is disappointing. The long-awaited comprehensive document turns out to be a brief collection of short statements lacking deeper analysis. However, one can hope that this document is merely a starting point for a broader debate on a genuine migration strategy, which will soon be presented. This communication outlines three potential opportunities and three key risks that may arise from the proposed approach.