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Real Effective Exchange Rate and Industrial Productivity in Croatia: Wavelet Coherence Analysis

Author

Listed:
  • Bošnjak Mile

    (PhD, Assistant Professor, Faculty of Economics and Business, Zagreb University of Zagreb, Address: Trg J F. Kennedyja 6, 10 000Zagreb, Croatia)

  • Kordić Gordana

    (PhD, Full Professor, Department of Finance, Faculty of Economics and Business Zagreb, University of Zagreb)

  • Novak Ivan

    (PhD, Assistant Professor, Faculty of Economics and Business, ZagrebUniversity of Zagreb)

Abstract

This paper brings releationship between real effective exchange rate and industry production in Croatia. Research sample consists of monthly data from January 2000 up to June 2019. Following wavelet coherence approach, empirical results reveal the relationship across time and frequency domain. The empirical obtained from wavelet coherence analysis and confirmed with conventional correlation analysis suggested positive relationship between industrial productivity and real effective exchange rate in Croatia, with depreciation as a factor of positive influence on industrial productivity. Research results provided in the paper also contributes to the debate on exchange rate policy in Croatia, extending the discussion on national exchange rate policy implications.

Suggested Citation

  • Bošnjak Mile & Kordić Gordana & Novak Ivan, 2021. "Real Effective Exchange Rate and Industrial Productivity in Croatia: Wavelet Coherence Analysis," South East European Journal of Economics and Business, Sciendo, vol. 16(1), pages 30-37, June.
    • Handle: RePEc:vrs:seejeb:v:16:y:2021:i:1:p:30-37:n:10
    DOI: 10.2478/jeb-2021-0003
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    References listed on IDEAS

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    4. Mance Davor & Žiković Saša & Mance Diana, 2015. "Econometric Analysis of Croatia’s Proclaimed Foreign Exchange Rate," South East European Journal of Economics and Business, Sciendo, vol. 10(1), pages 7-17, April.
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    Cited by:

    1. Đorđe ĐUKIĆ & Mustafa ÖZER & Mališa ĐUKIĆ, 2023. "The Analysis of the Dynamic Relationships between Real Exchange Rates and Macroeconomic Variables in Selected Countries with Targeted Inflation: Evidence from Linear and Non-Linear ARDL Models," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(2), pages 104-124, June.

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    More about this item

    Keywords

    real effective exchange rate; industrial productivity; wavelet coherence analysis; Croatia;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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