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Title: The effects of macroeconomic policies under fixed exchange rates: A Bayesian VAR analysis
Authors: Tevdovski, Dragan 
Petrevski, Goran 
Bogoev, Jane
Keywords: Fiscal policy, monetary policy, Bayesian VAR
Issue Date: Jan-2019
Publisher: Informa UK Limited
Journal: Economic Research-Ekonomska Istraživanja
Abstract: We analyse the effects of fiscal and monetary policies in Croatia and Macedonia estimated by a Bayesian vector autoregression (VAR). The main results of the study are as follows. Fiscal tightening leads to economic expansion in Macedonia and a decline in economic activity in Croatia. In both countries fiscal tightening leads to a decline in inflation and money market rates. Monetary tightening leads to output contraction and a decline in inflation in both countries. We find an opposite reaction of the fiscal authorities to a monetary shock, i.e., monetary contraction is accompanied by fiscal tightening in Croatia and by loose fiscal policy in Macedonia.
DOI: 10.1080/1331677x.2019.1579661
Appears in Collections:Faculty of Economics 03: Journal Articles / Статии во научни списанија

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