This paper explores the impact of the USD/EUR exchange rate on inflation in the Central and East European countries (CEEC). In particular, we analyse which portion of the variation in inflation in the CEEC can be attributed to the USD/EUR exchange rate, as an external shock. In addition, we...

Bank lending, and particularly lending to households, grew rapidly after the restructuring of transition countries' banking systems. While lending booms raise concerns about credit quality and the current account, a Croatian case study suggests that the credit quality issue may not be so severe...

Despite almost 10 years of low inflation, Croatia continues to experience high levels of dollarisation/‘euroisation’. Roughly, three-quarters of bank deposits and currency in circulation are held in foreign currency. This limits the manoeuvering room for monetary policy. Banks try to avoid...

This paper measures the redistribution of financial and physical resources to different regions is Yugoslavia that arise from tax exemptions, interest-rate subsidies, and price distortions. Despite, or perhaps because of the lower marginal productivity of capital in less-developed regions, the...

We analyze the impact of monetary and financial policies on the level of financial euroization in Croatia during 2002–2010. We find strong empirical evidence that these policies effectively helped reduce financial euroization in 2002–2007. During the financial crisis, some of the measures...