Croatia in the Second Stage of Transition, 1994-1999

Published: 20/6/2000
Publication Working Papers
Issue W - 1
Authors Velimir Šonje and Boris Vujčić
Date December 1999
JEL E65, P2
ISSN 1334-0131


working papers, transition, international comparisons, economic policy

The paper attempts to summarize the important aspects of the transition experience in Croatia, focusing upon the second stage of transition, 1994-1999. The presentation is not historical, but rather links similar problems using international data comparisons and occasionally cross-section econometrics. Many topics are briefly surveyed: 1) relation between money growth, inflation, exchange rate regime and currency substitution; 2) determinants and costs of banking crisis; 3) relation between banking supervision, central bank credibility and exchange rate regime; 4) underlying reasons for the emergence of arrears in economy; 5) relationship between monetary and fiscal policy; 6) reasons for poor export performance and high external imbalance in Croatia; and 7) some basic labor market developments. The paper also draws some policy conclusions.