THE RELATIONSHIP BETWEEN POTENTIAL ECONOMIC GROWTH AND LEGAL PROCEDURE ENACTMENTS IN CROATIA

Economic utility and political efficiency are closely related fields within macroeconomic management for domestic/international and political/economic institutions and their policy-making strongly varies in their actions towards encouraging growth, remedying structural imbalances, ensuring equitable distribution of income and wealth, and etc. This paper analyzes the relationship between economic expectations and procedure of the adoption of new laws in the Croatian Parliament. The main objective of this study is to show whether there exists a relationship between expected, i.e. potential economic growth and the way in which the new laws are passed. In that manner, we will explain the dynamics of procedure enactments and evaluate whether that procedure has an impact on the potential GDP. Empirical assessment is based on a simple regression model and spectral analysis. Results suggest that there indeed exists a strong bond between the observed variables, so that the adoption of new legislation has a major impact on future economic expectations.