Cover -- Contents -- IN SEARCH OF AN EFFECTIVE GROWTH MODEL -- A. The Pre-Crisis Growth Paradigm and its Legacy Vulnerabilities -- B. Policy Recommendations Towards an Effective Growth Model -- FIGURE -- 1. Business Environment and Growth Constraints -- IMPROVING THE LABOR MARKET: CHALLENGES AND OPTIONS -- A. Background -- B. What Are the Possible Causes of Meager Labor Market Outcomes? -- C. Policy Implications -- FIGURES -- 1. Labor Market Indicators, 2004-2012 -- 2. Wage Indicators, 2009-13 -- 3. EBRD Transition Indicators, 2012 -- 4. Wage and Productivity Indicators, 2012 -- 5. Labor Market Indicators from The Global Competitiveness Report 2011 -- REFERENCES -- EXTERNAL COMPETITIVENESS ASSESSMENT -- A. Export Performance -- B. Competitiveness Pressures -- FIGURES -- 1. Recent Trade Developments -- 2. Trade, 2008-2012 -- REFERENCES -- EXTERNAL SUSTAINABILITY ASSESSMENT -- A. Partial External Adjustment -- B. External Vulnerabilities and Buffers -- C. External Sustainability Illustrative Simulations -- FIGURES -- 1. Balance of Payments, 2004-2012 -- 2. External Sustainability Illustrative Simulations -- REFERENCES -- EXPLORING OPTIONS FOR ENHANCING FISCAL CONSOLIDATION -- A. Background -- B. Achieving a Credible and Durable Fiscal Consolidation -- FIGURES -- 1. General Government Expenditure in Serbia and Selected Economies -- 2. Public Debt in Serbia and Selected Economies -- REFERENCES -- HAS SUB-NATIONAL SPENDING ADDED TO FISCAL PRESSURES? -- A. Expenditure Decentralization in a Regional Context-Stylized Facts -- B. Fiscal Decentralization in Principle and in Practice -- C. Empirical Findings -- D. Are Known Decentralization Risk-Factors Relevant in a Serbia Context? -- E. Strengthening Fiscal Decentralization Policies in Serbia: Policy Options -- BOX -- Box 1. Local Government Arrears Clearance Strategy -- FIGURES.

1. Subnational Revenue and Expenditures -- 2. 2011 Amendments to Subnational Financing Framework -- TABLE -- 1. Subnational Fiscal Rules in Selected Transition Economies -- REFERENCES -- DIAGNOSING AND ADDRESSING SERBIA'S STRUCTURAL FISCAL CHALLENGES -- A. Evolution of Serbia's Fiscal Challenges -- B. Diagnosing Serbia's Fiscal Challenges -- C. A Roadmap for Reform -- REFERENCES -- PENSION REFORM -- A. Current Pension Framework -- B. Baseline Projections -- C. Reform Options -- TABLE -- 1. Savings from Different Reform Options, in percent of GDP -- FIGURE -- 1. Pension Model Simulations, 2010-50 -- APPENDIX -- I. Model Assumptions -- REFERENCES -- CORPORATE INCOME TAX AND OTHER CORPORATE TAXES -- A. CIT Rate and Exceptions -- B. Non-Tax Levies -- TABLES -- 1. Revenue Losses Associated with Corporate Income Tax Incentives and Projected Savings from Enacted Reforms, 2009-11 -- REFERENCES -- MACRO-FINANCIAL LINKAGES -- A. Low Credit Growth: a Consequence of Weak Demand or a Driving Force of Economic Slowdown? -- B. Changing Banks' Business Models and External Deleveraging: How Did It Affect Serbia's Economy? -- C. How is Serbia's Banking System Coping with the Macroeconomic Strains? -- D. Policy Implications -- FIGURES -- 1. Credit Growth Indicators, 2004-13 -- 2. Supply-Side Factors of Credit, 2006-13 -- 3. Exposure of BIS Reporting Banks to Serbia, 2006-2012:Q3 -- 4. Selected Financial Soundness Indicators, 2012 -- BOX -- Box 1. Construction of a Financial Stress Index (FSIX) -- REFERENCES -- INFLATION TARGETING IN A EUROIZED ECONOMY -- A. How Does Euroization Affect Inflation Targeting? -- B. IT and Foreign Exchange Market Interventions -- C. What do other Emerging Economies do in Practice? -- D. How to Move Towards More Widespread Use of Local Currency? -- E. IT in a Dollarized Economy: The Experience of Peru -- F. What Does This Mean for Serbia?.

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