Macroeconomic policies and adjustment in Yugoslavia: some counterfactual simulations
After a period of successful growth in the 1970s, Yugoslavia was hit very hard by a severe balance of payments crisis at the end of the 1970s that has overshadowed the economic scene since. What were the causes of the crisis? Could it have been averted through the adoption of alternative policies in the 1970s? What can be said about the adjustment policies pursued since 1980 in the light of the lessons of the 1970s? These questions are addressed in this chapter with the help of some counterfactual policy simulations for the period 1973-79, using a macroeconomic model developed for the Yugoslav economy.
KeywordsInterest Rate Real Exchange Rate Real Interest Rate Wage Growth Nominal Exchange Rate
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