IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Double-Dip Recession And Policy Options

Listed author(s):
  • Miroljub Labus

    (University of Belgrade, Faculty of Law)

Registered author(s):

    It is reasonable to expect the Serbian economy to decline up to -1% in 2012. A double-dip recession is inevitable. Lessons from the previous recession in 2009 suggest that an expansionary fiscal policy has clear limits, and that any misalignment of economic policies might be highly costly.This time, in addition to a recession and lack of policy coordination, the Serbian economy is exposed to the political risk associated with new elections. All of these risks deserve proper attention. In this paper, we provide a growth forecast for 2012 and discuss three potential policy response options. Coordination between fiscal consolidation and monetary expansion is the preferred solution. However, no one should take this for granted, and even if it is adopted by the Serbian policy makers, the problem of unsustainable long-term growth will remain. The model developed in this paper is a New-Keynesian model, modified to tackle the issue of fiscal consolidation. We expect that the inflation targeting policy framework will prevail in 2012, despite its poor record, and that this provides a good reason for using DSGE models to simulate policy options.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Article provided by SAE - Serbian Association of Economists in its journal SAE Journal.

    Volume (Year): (2012)
    Issue (Month): 1-2 (January)
    Pages: 33-40

    in new window

    Handle: RePEc:srb:journl:y:2012:i:1-2:p:33-40
    Contact details of provider: Postal:
    Bulevar Mihajla Pupina 147, Dobrinjska 11, Belgrade, Serbia

    Phone: +381 11 3613-409; +381 11 2644-980
    Fax: +381 11 3629-689
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:srb:journl:y:2012:i:1-2:p:33-40. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Milos Stamatovic)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.