QUANTITATIVE AND QUALITATIVE ANALYSIS IN ECONOMICS
THE ROLE OF MACROECONOMIC INDICATORS IN STIMULATING ECONOMIC GROWTH: A CASE STUDY OF THE REPUBLIC OF SERBIA
Nemanja Lojanica
Abstract: For Serbia, as a country in transition, it is essential to manage the instruments of monetary and fiscal policy adequately in the context of the intensification of economic activity. The primary aim of this paper is to examine the connections between economic growth, inflation, money supply, interest rates and government expenditure, with special emphasis on causalities moving to and from economic growth. Granger causality test was used to determine potential causalities of the variables. Variance decomposition of prediction error was also used as an additional method. Time period of observation ranges from Q1 2007 – Q2 2016. The empirical results show that given macroeconomic indicators cause certain changes in the economic growth. The analysis has shown that monetary policy instruments have greater impact on fluctuations. Consequently, an adequate coordination of monetary and fiscal policy is required for stable and sustainable growth in Serbia.
Keywords: economic growth, economic policy, the Republic of Serbia, Granger causality, variance decomposition
Published: p. 21-29
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