Assumptions and relations of the Balassa-Samuelson model permit under-stand the development of real convergence in Central European countries. Quantification of the Balassa-Samuelson effect (BSE) found its intensive formation in the years 1996 – 2008 and the cessation of it in the crisis period 2009 – 2013. It was confirmed the BSE size depends on productivity increasing in the segment of economy producing negotiable goods. The economic crisis weakened market mechanism, which in times of economic prosperity give rise to BSE. Therefore are seeking both industrial policy capable of supporting the creation of BSE and parts of economy suitable for its use. While continuing to promote foreign investment it is advised to encourage innovative activity and employment widening in the domestic business sector, especially in its SMEs.
After the start of recovery (in 2010) from previous recession, the development of the Slovak economy in 2011 became more volatile. In the first half of 2011 the positive tendencies continued and the economic development was more favourable than expected, in the second half of 2011 renewed concerns about a new recession emerged. In 2011, some significant changes in development tendencies occurred: the price level growth revived, the public finance balance improved and the employment growth was observed after a longer period. The impacts of debt crisis and the pessimism connected with it were at the time not as negative as expected earlier. Therefore, we are not seeing the recession as the most likely development scenario up to 2013. We are expecting that the economic development in the upcoming years will be accompanied by relatively weak economic growth, with some signs of instability. For the policy makers it will be important, in addition to the stabilization and public finance consolidation, to restore the confidence of economic agents in the economy.
After the unexpectedly severe recession (2009) and equally unexpected recovery (2010), the Slovak economy balanced between recovery and a second recession for two years (2011 and 2012). The Slovak economy was more resilient against “the second wave of the crisis” than previously expected. Although the euro area was in recession in 2012, the Slovak economy grew (albeit slightly). However, after the significant deceleration of economic growth in the last quarter of 2012, the expectations of a recession have returned. After approximately one and a half year of waiting, the Slovak economy will be fully confronted with the second wave of the crisis. The economy cannot resist the second wave of the recession (which has already hit the euro area) forever. Significant slowdown hits the economy at a time when the euro area economy has started to improve gradually. This could mean that the significant decline in economic growth could be coupled with a possible alleviation of the difficulties.
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