The Proper Role of Government in Post-COVID Recovery: The Case of the Serbian Economy

ABSTRACT

This paper investigates the proper role of the Serbian government during the recovery of the economy after the COVID-19 pandemic. Based on corporate liquidity during the pandemic and with the help of nonhierarchical clustering, this research identifies a group of industry sectors and companies in the Serbian economy with the lowest corporate liquidity in stress. Results of this research show that there are about one-third of companies in the Serbian economy with the lowest corporate liquidity in stress; this is critically sensitive in informing the next steps of the government as well as in financial measures introduced by the government.

KEYWORDS:

• Corporate liquidity
• COVID-19
• government
• risk management
• stress testing

JEL CLASSIFICATION:

• G32
• C53
• D22

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Srečko Devjak

Srečko Devjak is an economist with the risk management practice from international banks in the area of treasury risk management, model risk management and capital risk management. His research focuses on measurement of financial risks. Srecko holds PhD in operations research from University in Ljubljana, Faculty of economics.