Empirical analysis of monetary policy: croatia vs. Slovenia

Neven Vidaković

MPRA Paper from University Library of Munich, Germany

Abstract: This paper tries to explain empirical causation between the exports and the real exchange rate. The paper develops a simple model, the model is based on the relationship of exports to: real interest rates differential, foreign demand for domestic goods and real exchange rate. The paper then tests the model with the empirical data from Croatia and Slovenia. The empirical analysis in the paper finds: there is very limited relationship between real interest rates differentials, foreign demand and exports. However there is a strong relationship between exports and the real exchange rate. When empirically tested the model confirms the monetary policy of sliding exchange rate in Slovenia was vastly superior to the monetary policy of fixed exchange rate in Croatia .

Keywords: real exchange rate; monetary policy; exports (search for similar items in EconPapers)
JEL-codes: E42 F41 O24 (search for similar items in EconPapers)
Date: 2007
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Published in Naše Gospodarstvo / Our economy 0547-3101 (2007): pp. 55-65

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https://mpra.ub.uni-muenchen.de/64583/1/MPRA_paper_63933.pdf revised version (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:63960

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