Monetary Effectiveness in Small Transition Economy – The Case of the Republic of Serbia

Dejan Živkov (), Jovan Njegić (), Nataša Papić-Blagojević () and Jovan Petronijević ()
Additional contact information
Jovan Njegić: Higher School of Professional Business Studies, Novi Sad, Serbia.
Nataša Papić-Blagojević: Higher School of Professional Business Studies, Novi Sad, Serbia.
Jovan Petronijević: Faculty of Business Economy and Entrepreneurship, Serbia.

Journal for Economic Forecasting, 2016, issue 3, 5-18

Abstract: This paper examines the factors which influence the effectiveness of central bank in Serbia. Specifically, we have observed the effect of the various macroeconomic variables, inter alia uncovered interest rate parity (UIRP) premium on the monetary policy. The results showed that risk premium, as the balancing value in UIRP, had a significant impact on the monetary policy. The research examined two sub-samples – before and after the world crisis. Before the crisis, central bank could affect its indirect targets, the nominal exchange rate and money supply, via higher interest rate. However, higher interest rate proved inefficient after the crisis, primary due very huge and abrupt depreciation of RSD SVAR model and its impulse response function (IRF) have been used in the paper.

Keywords: risk premium; structural VAR; referent interest rate; Serbia; monetary policy (search for similar items in EconPapers)
JEL-codes: C01 E52 F30 F31 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.ipe.ro/rjef/rjef3_16/rjef3_2016p5-18.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rjr:romjef:v::y:2016:i:3:p:5-18

Access Statistics for this article

Journal for Economic Forecasting is currently edited by Lucian Liviu Albu and Corina Saman

More articles in Journal for Economic Forecasting from Institute for Economic Forecasting Contact information at EDIRC.
Bibliographic data for series maintained by Corina Saman ( this e-mail address is bad, please contact ).