The Role of Monetary Policy as the Foundation of Economic Development in Bosnia and Herzegovina

ŽIVKOVIĆ, Matej and HODŽIĆ, Lejla (2016) The Role of Monetary Policy as the Foundation of Economic Development in Bosnia and Herzegovina. Journal of Economic and Social Studies, 6 (1). ISSN 1986 – 8502, doi:

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Abstract: Macroeconomic stabilization of every country depends largely upon the conduct of appropriate economic policy, which comprises both fiscal and monetary policy; therefore, it is of great importance to choose the most adequate and productive ones. Many countries across the board have employed monetary policy in their attempt to ease the consequences of economic crises in the aftermath of global financial meltdown, and in the search for sustainable economic development. This paper was confined to the monetary policy in Bosnia and Herzegovina specifically, and its aim was to address the current Currency Board Regime along with the available monetary policy instruments and to determine whether an opportunity for the improvement of economic growth and consequently economic development lies within it. The importance of Central Bank was stressed out, as it represents the anchor of the monetary system. The paper comprises the analysis of the implemented CBR, its brief history, monetary policy instruments available and its consequences on the economy of B&H and based on that, the recommendations for exit-strategy which, ceteris paribus, represent a key to achieving higher levels of development. The economic indicators suggested that macroeconomic performance under CBA is not advantageous for B&H; therefore, it is thought that abandoning the arrangement either by joining the EMU or by making the Central Bank more independent is necessary. Key words: Macroeconomic Stabilization Monetary Policy Instruments;B&H Currency Board Regime; Economic Development; Monetary Easing

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Journal of Economic and Social Studies
Depositing User: Mrs. Emina Mekic
Date Deposited: 29 Jan 2016 11:43
Last Modified: 29 Jul 2016 10:13

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