movements, monetary and real markets, bank profits and failures ; institutional changes and power struggles ; practical debates, among financiers, within the central bank, in congress and in public opinion, reconstructed precisely and passionately ; individual characters ; and fascinating hypotheses on what might have happened if a given public figure had not died prematurely or if a given dispatch had been sent one day earlier. all this makes for compelling reading ( at least in some parts : i shall not claim that the reader ’ s attention never lets up for the almost one thousand pages of the book ). in the end though, what is the epistemological status of the conclusions that may be drawn from a huge mass of data and observations that is reasoned, but not super - systematic and untramelled by rigorous quantitative scrutiny? i do not have a clear - cut answer. i will only say, and this is nothing new, that the book makes one ponder the comparative virtues of an approach of this kind compared with the one that is not only dominant by far today, but is also considered indispensable to reach conclusions – be they positive or normative – that may be called scientific. formalised theory and rigorous econometric methods force us to formulate hypotheses in a precise and coherent way and make it possible to test them against popper ’ s falsification principle. however, the price to pay, in the realm of economic science, is a ‘ flattening ’ or hyper - simplification of reality as well as ( on the part of the least aware among us ) a certain disregard for the concrete history of facts. this may create an illusion as to the general validity of the results obtained and can even blind us with respect to the evidence presented. on may conclude, rather obviously, that both approaches are useful and necessary, and both may be fruitful in great hands but perhaps barren in the hands of others. however, since econometrics has made huge strides in the meantime, and can now make use of more complex and flexible models than were previously available, i may perhaps add, as a valediction, that the quantitative evidence to which i have alluded during this presentation deserves a little more attention – both qualitative and econometric – than it has received in the recent past. in any case, what is needed is an open mind, a focus on concrete facts, and perhaps a touch of eclecticism, the latter being something

fehmi mehmeti : the financial system proved capable of withstanding the crises caused by the pandemic and the war in ukraine speech by mr fehmi mehmeti, governor of the central bank of the republic of kosovo, at the year - end press conference with journalists, pristina, 22 december 2022. * * * dear representatives of the media, dear citizens, first of all, let me thank you for your presence at this year - end conference and for the continuous and effective cooperation that we have cultivated over the years with the aim of informing the public as fairly as possible about the cbk's activity, as well as economic and financial developments in the country. communication with the media continues to be an extremely important part of cbk's activity. through your fair reporting, we have managed to keep the public well informed about developments in the country's financial system and economy. therefore, i would like to take this opportunity to express my high appreciation for the professionalism shown during this year as well. despite all the difficulties we have faced, i am happy that the central bank of the republic of kosovo has managed to implement its objectives this year as well, ensuring a stable financial system, which in recent years has managed to cope with success the crises caused by the covid 19 pandemic and now the russian aggression in ukraine, but also to be one of the main pillars of support for businesses and individuals, and with this also for the country's economy. now, allow me to present before you a summary of the developments that characterized the country's economy and financial system during this year, based on the latest data available to us for the respective sector. the economy of kosovo started the year 2022 with a very good perspective, since we were leaving behind a very successful year, where according to the estimates of the statistics agency of kosovo, the real growth rate of the gross domestic product in 2021 was 10. 75 percent. however, during 2022, change of global dynamics as a result of the war in ukraine, which were accompanied by increase of inflation, changing monetary policies and increase of interest rates, and slowdown of global trade growth as a result of supply chain disruptions, was also reflected in the economic activity in kosovo. according to cbk's estimates, gdp in 2022 is expected to record a slowed growth of 3 to 4 percent, mainly due to the contraction of domestic demand and increase in imports, while exports have had a