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ECB Monetary Policy Actions and the Economic Conditions of a Non-Euro Member: The Case of Croatia

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  • Berisha Edmond

    (School of Business, Fairmont State University, Fairmont, WV 26554, USA)

Abstract

This paper analyses the importance of ECB monetary policy shocks in the domestic activities of a non-EMU member, Croatia, with the main focus on the inflation rate. Using a Vector Autoregressive Model with an exogenous variable specification, it is found that the contraction of foreign monetary shocks have a significant positive impact on the local inflation rate and output. Interestingly, the interest rate gap exerts a statistically significant effect on the economic activities of Croatia, suggesting that targeting exchange rate stability does not eliminate the significance of ECB’s monetary policy changes.

Suggested Citation

  • Berisha Edmond, 2017. "ECB Monetary Policy Actions and the Economic Conditions of a Non-Euro Member: The Case of Croatia," Global Economy Journal, De Gruyter, vol. 17(2), pages 1-10, June.
    • Handle: RePEc:bpj:glecon:v:13:y:2017:i:1:p:10:n:6
    DOI: 10.1515/gej-2017-0008
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    References listed on IDEAS

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    More about this item

    Keywords

    ECB; CNB; inflation; output; VAR;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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