photo by: vladimir tatarevic

Working Papers

Working Papers posted in this section are “work in progress”, under submission, or in press and forthcoming elsewhere.

WP18/2020 Exchange Rate Targeting


The NBS pursues a policy of exchange rate targeting, contrary to its official Memorandum on monetary policy. The NBS informally modified the Memorandum in two ways: it restricted the supply of securities under reverse open market operations and targeted informal exchange rate levels by frequent foreign...

WP17/2020 The Role of Fiscal Policy in the Monetary Reconstruction Program


Dragoslav Avramovic was the coordinator of economic policies that stopped hyperinflation in February 1994. That remarkable success, however, was not sustainable. The main reason was the mismatch between fiscal and monetary policy - both during his tenure as governor of the National Bank of Serbia (1994:3 -...

WP16/2019 Transition and Post-Conflict Macroeconomic Policies in Serbia


Transition in Serbia from a self-managed economy to a market economy is still underway for state-owned enterprises but mostly completed in the sector of socially-owned enterprises. The conflict period from 1991 to 1999 remarkably determined the starting point of transition and...

WP15/2019 Multipliers and Foreign Direct Investment Impact on Growth



One way to achieve high and sustainable growth is for the government to use subsidies and tax incentives not only for foreign investments, but also for domestic investments, in sectors where multipliers justify such a policy. In this paper, we introduce...

WP14/2018 Final Account of the Three Broad Governments in Serbia


It is the right time to compile the final account of performance for all post-Milosevic’s governments. They can be classified into three groups of broad governments. Macroeconomic policies pursued by these governments have not a clear-cut theoretic delineation, but nevertheless might be identified...

WP13/2018 Business Cycles in Serbia and its EU Neighbours


In this paper, we have analysed business cycles in Serbia and its five neighbouring members of the EU (Bulgaria, Romania, Hungary, Croatia and Slovenia) for the period Q1Y2000-Q3Y2017. This period was long enough to capture two depression and two prosperity stages. The analysis was based on a RBC...

WP12/2018 Policy of Change and Economic Stabilization in Serbia


This paper examines in detail the relation between political changes in Serbia and stabilization of its economy. Changes can take place only if opposition becomes...

WP11/2017 GDP Revision and Nowcasting in Serbia


This paper addresses the issues of Quarterly National Accounts compilation and Gross Domestic Product (GDP) revisions as well as GDP short-term forecasting based on available monthly series of economic and financial indicators. If GDP is promptly and properly measured, policy makers and the general...

WP10/2016 From Fiscal Consolidation to Fiscal Optimization


The fiscal consolidation program in 2015 was a success. Despite this success, it is time to consider a switch away from the fiscal consolidation policy towards a fiscal optimization policy. By “fiscal optimization policy” we mean a proper design of fiscal instruments that might lead towards...

WP9/2016 Monetary Transmission Channels in DSGE Models: Decomposition of Impulse Response Functions Approach


The paper presents decomposition of impulse response functions (IRFs) as a new diagnostic tool for Dynamic Stochastic General Equilibrium (DSGE) models. This method works with any DSGE model of arbitrary complexity or theoretical background. It is also applicable to any policy transmission channels. We...

WP8/2015 Policy mix for fiscal consolidation in Serbia: Conditional forecast approach


The Serbian Parliament has adopted the fiscal consolidation program recognizing an exponentially rising public debt as a real threat to the economy that must be contained in order to avoid sovereign default. Despite the legacy of unfavorable macroeconomic development due to last-year’s flood, a...

WP7/2014 QUEST_Serbia: Installation Manual and Belox DSGE Model Simulator

This paper is about Belox DSGE Model Simulator software package developed for the QUEST_Serbia DSGE model.

WP6/2014 QUEST_Serbia: DSGE Model with Practical Guide

This paper is about QUEST_SERBIA DSGE model and its Practical Guide. The model is based on the European Commission’s QUEST III model.

WP5/2014 Fiscal consolidation and total factor productivity


Fiscal consolidation is a necessary means to contain rising public debt, but it will not provide growth and employment over the mid-term and must be much harsher than usually expected. Rising total factor productivity should complement this policy. In a DSGE framework, by using our QUEST_SERBIA model,...

WP4/2013 Exchange rate and repo interest rate in Serbia: What happened in 2012 and lessons for reindustrialization


Monetary policy changes in 2012 were unpredictable. This cannot be simply attributed to the election cycle. More fundamentally, incoherent policy measures have been present since the onset of the 2008 global recession. Within such a framework, industrialization and economic policy were treated as unrelated and...

WP3/2012 Double-Dip Recession and Policy Options


It is reasonable to expect the Serbian economy to decline up to -1% in 2012. A double-dip recession is inevitable. Lessons from the previous recession in 2009 suggest that an expansionary fiscal policy has clear limits, and that any misalignment of economic policies might be highly costly. This time, in...

WP2/2010 Competition and Growth Policies in Serbia within the New Economic Geography Framework


Increasing returns to scale combine growth with monopolistic competition. In the corporate sector of Serbia, we have identified representative firms with increasing, constant and decreasing returns to scale. From regional aspect, the returns to scale are increasing in the north and decreasing in the...

WP1/2009 Structural Deficiencies and Economic Crises: The Case of Serbia


The paper applies the co-integrated VAR methodology and data analysis in order to explain the origin of contemporary crisis in Serbia. It separates the impact of long-term structural factors from short-term business shocks. That leads to the conclusion that this crisis in Serbia is a typical current...