'Soft Landing' in the Erm2: Lessons from Slovenia

19 Pages Posted: 16 Aug 2005

See all articles by Velimir Anton Bole

Velimir Anton Bole

Economic Institute of the Law School

Dusan Mramor

University of Ljubljana - Faculty of Economics

Date Written: April 26, 2005

Abstract

In the paper, we explain the logic and implementation of policy making in the last (landing) phase of the process of entering the EU and ERM2 in Slovenia. Basic characteristics of the performance of the economy at the start of the landing phase are described; special focus is given to the deteriorating fiscal stance and inadequate non-tradable sector market structure. It is emphasized that entering the landing phase presented significant shock for the performance of the economy, as a consequence of the needed change in the goals and horizon of the policy makers. We show that specific macroeconomic strategy of not allowing equilibrium in one segment to be achieved by causing or allowing disequilibrium in other segments, was as in previous transition phases used also in the landing phase. We conclude that this strategy was the core of the successful "landing", as is documented by the behavior of all relevant nominal and real macroeconomic variables.

Keywords: Macroeconomic policy, EU, ERM2, EMU, transition economies, Slovenia

JEL Classification: E6, E52, E58, E31, E43

Suggested Citation

Bole, Velimir Anton and Mramor, Dusan, 'Soft Landing' in the Erm2: Lessons from Slovenia (April 26, 2005). Available at SSRN: https://ssrn.com/abstract=772544 or http://dx.doi.org/10.2139/ssrn.772544

Velimir Anton Bole

Economic Institute of the Law School ( email )

Presernova 21, P.O. Box 1722
SI-1001 Ljubljana
Slovenia
+386 1 251 8704 (Phone)
+386 1 425 6870 (Fax)

Dusan Mramor (Contact Author)

University of Ljubljana - Faculty of Economics ( email )

Kardeljeva ploscad 17
Ljubljana, 1000
Slovenia
+386 1 589 2400 (Phone)
+386 1 589 2698 (Fax)

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