{
  "title": "Exchange Rate Pass-Through and Monetary Policy in Croatia",
  "publication": "IMF Working Papers, June 1, 2002",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/exchange-rate-pass-through-and-monetary-policy-in-croatia-15869",
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  "summary": "Exchange rate targeting is considered the best policy option in dollarized economies when wages and prices are indexed to the exchange rate.",
  "sections": [
    {
      "heading": "Summary and main findings",
      "content": "- Exchange rate targeting is considered the best policy option in dollarized economies when wages and prices are indexed to the exchange rate.\n- Croatia is a highly dollarized economy.\n- Empirical investigation conducted in this paper shows that exchange rate pass-through has been low after stabilization.\n- This finding is robust to different methodologies (VAR, cointegration).\n- The low pass-through would suggest that dollarization is mostly limited to financial assets and therefore that strict exchange rate targeting may not necessarily be the best option.\n- Policy implications are unclear due to the endogeneity of the pass-through to the policy regime."
    },
    {
      "heading": "Methodology and analytical approach",
      "content": "- Econometric analysis using VAR (Vector autoregression) and cointegration techniques.\n- Time series analysis of exchange rate adjustments, exchange rate shocks, exchange rate movements, and pass-through to prices.\n- Consideration of price indexes including retail price index and HWWA commodity price index across the distribution chain."
    },
    {
      "heading": "Policy implications and interpretation",
      "content": "- Low post-stabilization exchange rate pass-through suggests limited pass-through from exchange rates to wages and prices in Croatia.\n- If dollarization is mostly limited to financial assets, strict exchange rate targeting may not necessarily be the optimal policy choice.\n- The paper emphasizes that policy conclusions are constrained by the endogeneity of pass-through to the prevailing policy regime, making definitive policy prescriptions unclear."
    },
    {
      "heading": "Key statistics and publication metadata",
      "content": "- Authors: Leo Bonato, Andreas Billmeier\n- Date: June 1, 2002\n- Series: Working Paper No. 2002/109\n- Issue: 109\n- Volume: 2002\n- Pages: 34\n- DOI: https://doi.org/10.5089/9781451853223.001\n- Stock No: WPIEA1092002\n- ISBN: 9781451853223\n- ISSN: 1018-5941\n\nExchange Rate Pass-Through and Monetary Policy in Croatia, IMF Working Papers, June 1, 2002.\n\n---\n\n Content in this bundle\n\n- Exchange Rate Pass-Through and Monetary Policy in Croatia - WP/02/109\n  - Exchange Rate Pass-Through and Monetary Policy in Croatia - WP/02/109 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Exchange Rate Pass-Through and Monetary Policy in Croatia - WP/02/109 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/exchange-rate-pass-through-and-monetary-policy-in-croatia-15869"
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    "Authors: Leo Bonato, Andreas Billmeier",
    "Published: June 1, 2002",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451853223.001",
    "Exchange rate targeting is considered the best policy option in dollarized economies when wages and prices are indexed to the exchange rate.",
    "Croatia is a highly dollarized economy.",
    "Empirical investigation conducted in this paper shows that exchange rate pass-through has been low after stabilization.",
    "This finding is robust to different methodologies (VAR, cointegration).",
    "The low pass-through would suggest that dollarization is mostly limited to financial assets and therefore that strict exchange rate targeting may not necessarily be the best option.",
    "Policy implications are unclear due to the endogeneity of the pass-through to the policy regime.",
    "Econometric analysis using VAR (Vector autoregression) and cointegration techniques.",
    "Time series analysis of exchange rate adjustments, exchange rate shocks, exchange rate movements, and pass-through to prices.",
    "Consideration of price indexes including retail price index and HWWA commodity price index across the distribution chain.",
    "Low post-stabilization exchange rate pass-through suggests limited pass-through from exchange rates to wages and prices in Croatia.",
    "If dollarization is mostly limited to financial assets, strict exchange rate targeting may not necessarily be the optimal policy choice.",
    "The paper emphasizes that policy conclusions are constrained by the endogeneity of pass-through to the prevailing policy regime, making definitive policy prescriptions unclear.",
    "Authors: Leo Bonato, Andreas Billmeier",
    "Date: June 1, 2002",
    "Series: Working Paper No. 2002/109",
    "Issue: 109",
    "Volume: 2002",
    "Pages: 34",
    "DOI: https://doi.org/10.5089/9781451853223.001",
    "Stock No: WPIEA1092002",
    "ISBN: 9781451853223",
    "ISSN: 1018-5941",
    "**Exchange Rate Pass-Through and Monetary Policy in Croatia - WP/02/109**"
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