Successful functioning of monetary and fiscal policies is a prerequisite for economic growth of a... more Successful functioning of monetary and fiscal policies is a prerequisite for economic growth of any economy. This paper is designed in a way that, among other things, analyzes two very important points of these policies, namely the budget on the one hand and inflation on the other. Also, the adoption of economic reform agenda, and the entry into force of the Stabilization and Association Agreement, Bosnia and Herzegovina (B&H) show serious intention to join the European Union. We determine the directions which must guide the consolidation of B&H fiscal system in order to create conditions for economic growth. Emphasis is placed on the importance of fiscal consolidation in B&H, and the consequences that may result if the implementation of fiscal consolidation is not done. This paper includes a comparison of the Croatian example as a neighbouring country in the period when it was a candidate for the membership in the EU, before the accession on 1 July 2013, because the reforms that Croatia had to undertake as a candidate country will also await B&H as a potential candidate for EU membership. The comparison established that the fiscal situation on the territory of B&H is identical to the status of neighbouring countries, so equal fiscal consolidation could be done. It indicates the reforms that authorities would need to undertake in the area of consolidation of the fiscal system. On the other hand, inflation is a monetary phenomenon that has preoccupied economists for decades. In this paper we analyze the inflation as a monetary phenomenon, and point out results of inflation and economic growth correlation. Due to the negative correlation between high inflation and economic growth, driven by these postulates, we analyze the level of inflation in B&H and the region to assess the success of the Central bank of Bosnia and Herzegovina. Also, this paper analyzes the fulfilment of Maastricht criteria relating to inflation, and the result obtained confirms that at this aspect Bosnia and Herzegovina fulfils this criterion.
Successful functioning of monetary and fiscal policies is a prerequisite for economic growth of a... more Successful functioning of monetary and fiscal policies is a prerequisite for economic growth of any economy. This paper is designed in a way that, among other things, analyzes two very important points of these policies, namely the budget on the one hand and inflation on the other. Also, the adoption of economic reform agenda, and the entry into force of the Stabilization and Association Agreement, Bosnia and Herzegovina (B&H) show serious intention to join the European Union. We determine the directions which must guide the consolidation of B&H fiscal system in order to create conditions for economic growth. Emphasis is placed on the importance of fiscal consolidation in B&H, and the consequences that may result if the implementation of fiscal consolidation is not done. This paper includes a comparison of the Croatian example as a neighbouring country in the period when it was a candidate for the membership in the EU, before the accession on 1 July 2013, because the reforms that Croatia had to undertake as a candidate country will also await B&H as a potential candidate for EU membership. The comparison established that the fiscal situation on the territory of B&H is identical to the status of neighbouring countries, so equal fiscal consolidation could be done. It indicates the reforms that authorities would need to undertake in the area of consolidation of the fiscal system. On the other hand, inflation is a monetary phenomenon that has preoccupied economists for decades. In this paper we analyze the inflation as a monetary phenomenon, and point out results of inflation and economic growth correlation. Due to the negative correlation between high inflation and economic growth, driven by these postulates, we analyze the level of inflation in B&H and the region to assess the success of the Central bank of Bosnia and Herzegovina. Also, this paper analyzes the fulfilment of Maastricht criteria relating to inflation, and the result obtained confirms that at this aspect Bosnia and Herzegovina fulfils this criterion.
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Papers by Haris Šarganović