Is real depreciation and expansionary fiscal policy effective? The case of Serbia

Main Article Content

Yu Hsing Yun Chen Morgan


Applying the IS-MP-IA model to study the impacts of exchange rate movements, expansionary fiscal policy and other relevant variables in Serbia, we find that real appreciation of the dinar, a higher government deficit-to-GDP ratio, a lower real lending rate in the euro area, a lower lagged real oil price, a higher Germany’s real GDP and a lower expected inflation rate would promote economic growth.

Article Details

How to Cite
HSING, Yu; MORGAN, Yun Chen. Is real depreciation and expansionary fiscal policy effective? The case of Serbia. Economics, Management and Sustainability, [S.l.], v. 2, n. 2, p. 24-30, dec. 2017. ISSN 2520-6303. Available at: <>. Date accessed: 30 mar. 2020. doi:


Andrić, V., Arsic, M., & Mladenovic, Z. (2016). The dynamics of public debt in Serbia-A nonlinear analysis (No. 144713). ZBW-German National Library of Economics.
Andrić, V., Arsić, M., & Nojković, A. (2016). Public debt sustainability in Serbia before and during the global financial crisis. Economic Annals, 61(210), 47-77.
Arsić, M. (2015). Highlights 4. What is necessary for the sustainable growth of the Serbian economy? Of Economic Trends and Policies in Serbia, 71.
Bahmani-Oskooee, M., & Kutan, A. M. (2009). The J-curve in the emerging economies of Eastern Europe. Applied Economics, 41(20), 2523-2532.
Bishev, G., & Boskov, T. (2015). Exchange rate and export-led growth in SEE6: Economic convergence machine–What happened? What next?.
Bungin, S., Reljić, M., & Ivković, B. (2015). Estimation of transmission mechanism of monetary policy in Serbia. Industrija, 43(3), 143-158.
Cassou, J. D., Erce-Domínguez, A., & Zamora, J. J. V. (2008). Recent episodes of sovereign debt restructurings. A case-study approach. Documentos ocasionales-Banco de España, (4), 9-84.
Dragana, P., Đurović-Todorović, J., & Prole, L. (2014). The dynamycs of the volume and structure of interest on the public debt of the Republic of Serbia. Ekonomika, 60(4).
Đukić, M., & Redžepagić, S. (2010). Fiscal responsibility and public debt. Economic Growth and Development of Serbia New Model, 329.
Đurović-Todorović, J., Đorđević, M., & Vuković, M. (2017). Fiscal stress analysis in the Republic of Serbia. Economic Themes, 55(1), 55-69.
Fabris, J. (2015). Inflation targeting in Serbia. Journal of Central Banking Theory and Practice, 4(2), 59-74.
Grubišić, Z., & Kamenković, S. (2015). An analysis of the effects of the economic policy in Serbia by the Mundell-Fleming Model. Economic Themes, 53(1), 51-62.
Ignjatijevic, I. M. S., & Ðorðevic, D. (2016). Analysis of investment factors which are influencing the growth of the Republic of Serbia. Ekonomika Poljoprivrede, 63(4), 1205.
Janković, N. (2015). A twin deficit: The issue of the Serbian economy. Ekonomski horizonti, 17(2), 109-124.
Jovancai-Stakić, A., & Stokanović, J. (2015). The possibility of reaching the fulfillment of Maastricht convergence criteria in Serbia. Megatrend revija, 12(2), 111-122.
Krstevska, A. (2015). Monetary policy objectives during the crisis: An overview of selected Southeast European Countries. Journal of Central Banking Theory and Practice, 4(1), 35-46.
Kurtovic, S., Halili, B., & Maxhuni, N. (2017). Bilateral trade elasticity of Serbia: Is there a J-curve effect? PSL Quarterly Review, 70(281).
Miletić, S. (2015). Modeling exchange rate volatility in CEEC countries: Impact of global financial and European sovereign debt crisis. Megatrend revija, 12(1), 105-122.
Petrović, P., & Gligorić, M. (2010). Exchange rate and trade balance: J-curve effect. Panoeconomicus, 57(1), 23-41.
Petrovic, P., & Mladenovic, Z. (2015). Exchange rate pass-through and the frequency of price adjustment across different inflation regimes. Panoeconomicus, 62(4), 409.
Romer, D. (2000) Keynesian macroeconomics without the LM curve. Journal of Economic Perspectives, 14, 149-169.
Romer, D. (2006) Advanced Macroeconomics. New York, NY: McGraw-Hill.
Stojanović, D., & Stojanović, D. (2017). Monetary policy transmission mechanisms in Serbia: evidence from the fully-fledged inflation targeting regime. Post-Communist Economies, 29(1), 117-137.
Stučka, T. (2003). The impact of exchange rate changes on the trade balance in Croatia. Croatian National Bank Working Paper Series, No. W – 11, October 2003.
Tabaković, J. (2017). Central bank policy after the crisis: Example of Serbia. Ekonomika preduzeća, 65(1-2), 83-102.
Tesic, A., Ilic, D., & Ðelic, A. T. (2014). Consequences of fiscal deficit and public debt in financing the public sector. Ekonomika Poljoprivrede, 61(1), 177.
Yazici, M., & Islam, M. Q. (2014). Exchange rate and bilateral trade balance of Turkey with EU (15) Countries. Journal of Business Economics and Finance, 3(3), 341-356.
Zdravković, A., Bradić-Martinović, A., & Stefanović, S. (2012). Sustainability of Serbian public debt in regard to economic crisis. Ekonomski signali, 7(1), 1-18.