Investigating Croatian Inflation through the Cointegration with Structural Break Approach (CROSBI ID 215362)
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Podaci o odgovornosti
Malešević Perović, Lena
engleski
Investigating Croatian Inflation through the Cointegration with Structural Break Approach
This paper analyses the inflationary process in Croatia during the period 1992-2011, using a cointegration with structural break approach. Our results indicate that there is a long-run relationship between inflation, exchange rate, unit labour costs and money growth. Currency depreciation and unit labour costs are found to influence inflation positively, and money supply negatively. We argue that the latter occurs because exchange rate targeting policy in Croatia results in a situation where endogenous money moves in the direction opposite to the exchange rate, so as to keep the exchange rate fixed. We, furthermore provide some evidence that money supply need not mean risks to inflation in the presence of declining money velocity
Inflation; Croatia; Cointegration; Transition
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Podaci o izdanju
5 (1)
2015.
5-32
objavljeno
1986-8499
1986-8502
http://dx.doi.org/10.14706/JEOC SS11517