The analysis of the Bosnia and Herzegovina’s level of compliance with the Maastricht convergence criteria
Journal Title: Acta Economica - Year 2013, Vol 11, Issue 18
Abstract
The idea of forming the European Monetary Union (EMU) derives from the fact that monetary integration has considerable economic advantages in lower transaction costs, greater price transparency and monetary stability. According to the optimum currency area (OCA) theory, it is very important for member states to achieve high level of convergence in order to exploit advantages of integrating and conducting a common policy. Maastricht convergence criteria imply that a country that enters the European Monetary Union (EMU) has a relatively low inflation, a stable currency, low budget deficits, relatively low interest rates and sustainable public debt. Before gaining the position of candidates for EMU, Bosnia and Herzegovina has to become a member of the EU and to achieve the criteria for membership related to the development of political, economic, administrative and judicial institutions. Since the Maastricht convergence criteria are more precise than other criteria, in the economic literature are often used as an indicators of the readiness of the candidate countries to access the E(M)U. In addition to consideration of theoretical and empirical knowledge about the monetary integration, the main goal of this paper is to, using the comparative analysis of actual economic performance of BiH and the region, provides us with knowledge and assessment of BiH stage of compliance with the Maastricht convergence criteria. The results show that a rational solution for BiH, after joining the EU, is based on gradual process of monetary integration, with stable monetary policy, effective management of public finances and careful management of public debt. The long-term goal of BiH lies in achieving real convergence through increased productivity and competitiveness.
Authors and Affiliations
Бранка Топић-Павковић
Keywords
Related Articles
- EP ID EP43769
- DOI https://doi.org/10.7251/ACE1318337T
- Views 275
- Downloads 0
Debts – source of financial and economic instability in the world
Uncertainty in international financial and currency markets has become common, while the only countries spared from the crisis are those that have been isolated from the rest of the world for many years. These countries...
A global aspects of the tourism on the non-developed, unsettled and neglected territories of the European Union, by the application of the integral rural development method
EU shows an interest for the tourism development, on the non- developed, unsettled, neglected and far off territories. The development of the rural tourism is realized according to the plan, through the integral rural de...
CORPORATE MANAGEMENT AND GLOBAL ECONOMIC CRISIS
The quality of corporate management is an important factor of business systems development and the national economy as well. Despite the efforts having been made to improve the quality of corporate management in the Unit...
FOREIGN EXCHANGE RESERVES AS A SHOCK PROTECTION – THE EXAMPLE OF BOSNIA AND HERZEGOVINA
Significant increase in foreign exchange reserves in recent decades, including the period of the global financial crisis of 2008 and 2009, has intensified research on the importance and role of foreign exchange reserves...
Analysis of the Effects of the EU Official Development Assistance to the Western Balkans
Official development assistance (ODA) implies the movement of capital with a minimum of one quarter of grant. It was established in the second half of the previous century, with the aim of getting developed countries to...