Arbeitspapier

How important are foreign shocks in small open economy? The case of Slovakia

In this paper, we provide evidence on the nature and the relative importance of domestic and foreign shocks in Slovak economy based on block-restriction vector autoregression model in 1999-2007. We document well-functioning monetary transmission mechanism in Slovakia. Subject to various sensitivity checks, we find that contractionary monetary policy shock has a temporary negative effect on the degree of economic activity and price level. We find that using output gap instead of GDP alleviates the price puzzle. In general, prices are driven mainly by foreign factors and the European Central Bank monetary policy shock on Slovak prices is more powerful than that of the National Bank of Slovakia. Slovak central bank interest rate policy seems to follow the ECB's interest rates. On the other hand, spectacular Slovak economic growth is primarily driven by domestic factors suggesting the positive role of recently undertaken Slovak economic reforms.

Sprache
Englisch

Erschienen in
Series: IES Working Paper ; No. 21/2008

Klassifikation
Wirtschaft
Central Banks and Their Policies
Open Economy Macroeconomics
International Policy Coordination and Transmission
Thema
small open economy
foreign shocks
monetary policy
Slovakia
euro area
Geldpolitik
Zentralbank
Eurozone
Geldpolitische Transmission
Kleine offene Volkswirtschaft
Slowakei
EU-Staaten

Ereignis
Geistige Schöpfung
(wer)
Horváth, Roman
Rusnák, Marek
Ereignis
Veröffentlichung
(wer)
Charles University in Prague, Institute of Economic Studies (IES)
(wo)
Prague
(wann)
2008

Handle
Letzte Aktualisierung
20.09.2024, 08:24 MESZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Horváth, Roman
  • Rusnák, Marek
  • Charles University in Prague, Institute of Economic Studies (IES)

Entstanden

  • 2008

Ähnliche Objekte (12)