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Original scientific paper

The Impact of Macroeconomic Policies on Manufacturing Production in Croatia

Marina Tkalec orcid id ; The Institute of Economics, Zagreb
Maruška Vizek ; The Institute of Economics, Zagreb

Full text: croatian pdf 53 Kb

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Full text: english pdf 448 Kb

page 61-93

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In this paper, we analyse the impact of macroeconomic policies on manufacturing production in Croatia. We use multiple regressions in order to assess how personal consumption, investments, interest rates, the real effective exchange rate, government consumption, fiscal deficit and foreign demand affect the output of 22 manufacturing sectors. The analysis is conducted on quarterly data from 1998:1q to 2008:3q. The results suggest that changes in fiscal conditions, the real effective exchange rate and personal consumption mostly affect low technological intensity industries. Production in high technological intensity industries is, in general, elastic to changes in investments, foreign demand and fiscal policy. Fiscal policy seems particularly important for manufacturing output, both in terms of the magnitude of fiscal elasticities and shorter time lags. Production in low technological intensity industries on average increases with the exchange rate depreciation, while in high and medium-high technological intensity industries it contracts as a result of depreciation.


manufacturing, monetary policy, fiscal policy, regression analysis, Croatia

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