engleski

Determinants of Current ccount Developments in Croatian Balance of Payments

The aim of this paper is to investigate most important determnants of the current account developments in Croatian balance of payments during the 1995-2007 period. The current account analysis is a useful tool for the national economic policy creators, enabling them to explain current account developments and to propose adequate economic policy measures in order to achieve sustainable levels. By using econometric techniques and methods the impacz of 24 potentialy significant macroeconomic variables on current account developments during the period of observation has been evaluated. A set of equations with lower numbewr of variables with the most significant impact on current account developments in Croatia ispresented. The estimations show that consumption, interest rate spread, net foreign assets and gross fixed capital formation have a significant impact, while net FDI inflows and external debt have a non-significant and negative impact on current account. Also, a relatively strong impact of gross fixed capital formation in previous periods (with a time lag of two quarters)is observed. Following the main research results, a set of recommendations is outlined for the purpose of efficient national macroeconomic policy management.

balance of payments, current account, trade balance

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