Economic Themes (2013) 51 (1) 2, 21-35
Zoran Grubišić, Marija Marčetić
Abstract: The beginning of the transition process has generated great expectations regarding the growth and development, increasing the absorption, which is reflected through deterioration of current account. Almost all transitional economies record high current account deficits using foreign savings and borrowing for financing domestic consumption and this is the reason for external imbalance. But after the global economic crisis and the current account reversal Serbia still has higher current account deficits comparing to other countries in the region. This paper examines the reasons for high absorption and current account deficit and the role of monetary and fiscal policy in maintaining external imbalance in Serbia.
Keywords: current account; FDI; fiscal deficit; loans; monetary policy
INFLUENCE OF FISCAL AND MONETARY POLICY ON EXTERNAL IMBALANCE IN SERBIA
Zoran Grubišić, Marija Marčetić
Abstract: The beginning of the transition process has generated great expectations regarding the growth and development, increasing the absorption, which is reflected through deterioration of current account. Almost all transitional economies record high current account deficits using foreign savings and borrowing for financing domestic consumption and this is the reason for external imbalance. But after the global economic crisis and the current account reversal Serbia still has higher current account deficits comparing to other countries in the region. This paper examines the reasons for high absorption and current account deficit and the role of monetary and fiscal policy in maintaining external imbalance in Serbia.
Keywords: current account; FDI; fiscal deficit; loans; monetary policy
