INTERACTION OF FISCAL AND MONETARY POLICY IN CROATIA: BETWEEN SCYLLA AND CHARYBDIS

In the last decade Croatia has experienced a dynamic economic and political path during which Croatia struggled with six years of recession and joined the EU. The observed period was characterized by uncoordinated economic policies and the lack of consistent fiscal policy partially due to the political instability, but also because of the lack of government's efforts to implement substantial fiscal consolidation. This paper analyzes institutional characteristics and limitations of interaction of monetary and fiscal policy in Croatia, with special emphasis on future policy mix implications.