Collection article | Sammelwerksbeitrag

Challenges of macroeconomic stability: a speed limit on Croatia's accession to the European Union?

This paper analyses three issues that could potentially affect macroeconomic stability and hence the speed of Croatia's accession to the European Union (EU): (i) Can the economy continue to rely on domestic demand as the main source of growth or is stronger reliance on exports necessary in the medium term? (ii) Is the external current account deficit in Croatia "excessive" and how have high deficits been corrected in the past? (iii) Does the expansion of bank credit to the private sector carry the seeds of macroeconomic instability? The paper argues that clearer signs of healthier growth have emerged since 2000, and that the Croatian economy should be able to adjust to the widening external deficit in 2002–03 in an orderly manner. However, there are reasons to be concerned about the expansion of private sector credit, as recently it has been financed largely by foreign borrowing. Large capital inflows are likely to become the main challenges for macroeconomic policy in the run-up to Croatia's EU accession. Policy makers will in particular have to address the so-called "Tošovský dilemma", i.e., set interest rates at an appropriate level: setting them too high would invite excessive short-term inflows, while setting them too low would lead to excessive investment and thus inflation.

ISBN
953-6047-48-9
Umfang
Seite(n): 21-47
Sprache
Englisch
Anmerkungen
Status: Veröffentlichungsversion; begutachtet

Erschienen in
Croatian accession to the European Union. Vol. 2, Institutional challenges

Thema
Wirtschaft
Wirtschaftspolitik
Kreditmarkt
wirtschaftliche Lage
Wirtschaftspolitik
Kapitalbewegung
Wirtschaftswachstum
EU-Beitritt
Stabilität
postsozialistisches Land
Kroatien
EU
deskriptive Studie

Ereignis
Geistige Schöpfung
(wer)
Mihaljek, Dubravko
Ereignis
Herstellung
(wer)
Ott, Katarina
Ereignis
Veröffentlichung
(wer)
Institute of Public Finance, Zagreb
Friedrich-Ebert-Stiftung Kroatien
(wann)
2004

URN
urn:nbn:de:0168-ssoar-61496
Rechteinformation
GESIS - Leibniz-Institut für Sozialwissenschaften. Bibliothek Köln
Letzte Aktualisierung
21.06.2024, 16:27 MESZ

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Objekttyp

  • Sammelwerksbeitrag

Beteiligte

  • Mihaljek, Dubravko
  • Ott, Katarina
  • Institute of Public Finance, Zagreb
  • Friedrich-Ebert-Stiftung Kroatien

Entstanden

  • 2004

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