This book provides a comprehensive overview of the economic consequences of central bank choices regarding exchange rate regimes. While most research focuses on the conduct of monetary policy, this study examines the aftereffects of these choices on a small open economy. The central bank typically has two main options: a stable or a variable exchange rate. The book analyzes how each regime influences the behavior of economic agents, including households, firms, banks, and fiscal authorities. The model is tested against data from post-communist transition countries, demonstrating that the choice of exchange rate regime is a crucial decision for a small open economy. This conclusion highlights the broader significance of monetary policy, as the selection of an exchange rate regime ultimately determines the economic trajectory of a country.

Autorentext

Neven Vidakovi was born in Slavonski Brod, Croatia. He holds a BA in Economics and Financial Mathematics from the University of Michigan, an MA in Economics from the University of Ljubljana, and a PhD from the University of Maribor. He is Vice Dean for Research, Publishing, and Quality at Effectus University College.