Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/217589
Authors: 
Apostolov, Mico
Josevski, Dusko
Year of Publication: 
2016
Citation: 
[Journal:] Journal of Central Banking Theory and Practice [ISSN:] 2336-9205 [Volume:] 5 [Issue:] 1 [Publisher:] De Gruyter Open [Place:] Warsaw [Year:] 2016 [Pages:] 141-157
Publisher: 
De Gruyter Open, Warsaw
Abstract: 
Applying IS-MP-IA model and the Taylor rule to selected Southeast European economies (Albania, Bosnia and Herzegovina, Macedonia and Serbia) we find that the change of effective exchange rate positively affects output, while the change of the world interest rate negatively affects output or it does not affect the output at all, and additional world output would help to increase output of the selected economies. A lower ratio of government consumption spending to GDP would also increase the output of the selected economies. Hence, fiscal prudence is needed, and the conventional approach of real depreciation to stimulate exports and raise real output does not apply to the selected Southeast Europe economies. When private household consumption is employed in the model, the coefficient on government spending to nominal GDP is insignificant implying that Ricardian equivalence does hold for the selected countries.
Subjects: 
IS-MP-IA
Taylor Rule
inflation targeting
monetary policy function
government spending to nominal GDP
world interest rates
JEL: 
D05
E05
F04
G28
H05
P02
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.