engleski

The Response of Monetary Policy to Recession: Evidence from Croatia

Croatia has experienced the onset of the world financial crises and its spillover effects onto the real sector, i.e. recession, slightly later than the other EU countries. Monetary policy guided by the Croatian National Bank has responded quickly, responsibly and decisively to adverse economic developments. However, the Croatian economy continues to face a severe recession and its economic prospects remain burdened with uncertainty. Considering the economic situation since the last quarter of 2008 in Croatia three periods can be distinguished. Each period called for different monetary focus and measures. This paper examines and discusses monetary policy responses in each time period. It is concluded that macroeconomic policy mix (including committed monetary policy, fiscal and wage policies and open economic conditions) should be considered in order to lead out the country from recession and build healthy base for its economic growth and prosperity.

financial crises ; recession ; monetary policy ; Croatia ; Croatian National Bank

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