ECB Monetary Policy Actions and the Economic Conditions of a Non-Euro Member: The Case of Croatia

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This paper analyses the importance of ECB monetary policy shocks in the domestic activities of a non-EMU member, Croatia, with the main focus on the inflation rate. Using a Vector Autoregressive Model with an exogenous variable specification, it is found that the contraction of foreign monetary shocks have a significant positive impact on the local inflation rate and output. Interestingly, the interest rate gap exerts a statistically significant effect on the economic activities of Croatia, suggesting that targeting exchange rate stability does not eliminate the significance of ECB's monetary policy changes.

Original languageEnglish
Article number20170008
JournalGlobal Economy Journal
Issue number1
Publication statusPublished - 1 Jan 2017



  • CNB
  • ECB
  • VAR
  • inflation
  • output

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