caa a22 4500 605534438 CHVBK 20210128100842.0 cr unu---uuuuu 210128e20151101xx s 000 0 eng 10.1007/s10663-014-9275-x doi (NATIONALLICENCE)springer-10.1007/s10663-014-9275-x The transmission of foreign shocks to South Eastern European economies [Elektronische Daten] [Goran Petrevski, Jane Bogoev, Dragan Tevdovski] This paper investigates the transmission of foreign shocks to economic activity and macroeconomic policies in three South Eastern European (SEE) economies: Croatia, Macedonia and Bulgaria. Specifically, we provide empirical evidence on the influence of several policy and non-policy shocks (euro-zone output gap, money market rate and inflation) on economic activity as well as monetary and fiscal policies in the three countries. The main motivation behind our empirical investigation is the fact that all of these economies are small open economies with rigid exchange rate regimes and different degree of integration within the European Union (EU). As for the methodological issues, we employ recursive vector autoregressions to identify the exogenous shocks in the euro-area. Generally, the estimated results imply that euro-zone economic activity has significant and relatively strong influence on these economies where foreign output shocks are transmitted relatively quickly. The results also suggest that the effects of foreign shocks are of larger magnitude in the countries that are more integrated with the EU. An additional finding is that positive foreign interest rate shocks trigger a contractionary response of domestic monetary policy notwithstanding the fact that domestic money market rates are not linked with euro-zone interest rates. Finally, euro-zone inflation is instantly transmitted to domestic inflation. We can explain these effects by several factors, such as: the fixed exchange rates, the relatively high trade integration of SEE economies within the euro-zone as well as the dependence of SEE banks on foreign financing. Springer Science+Business Media New York, 2014 Monetary policy nationallicence Vector autoregression nationallicence Exogenous shocks nationallicence Petrevski Goran Faculty of Economics, Saints Cyril and Methodius University, Goce Delchev Blvd. 9B, 1000, Skopje, Macedonia aut Bogoev Jane Kuzman Josifovski Pitu 1, 1000, Skopje, Macedonia aut Tevdovski Dragan Faculty of Economics, Saints Cyril and Methodius University, Goce Delchev Blvd. 9B, 1000, Skopje, Macedonia aut Empirica Springer US; http://www.springer-ny.com 42/4(2015-11-01), 747-767 0340-8744 42:4<747 2015 42 10663 https://doi.org/10.1007/s10663-014-9275-x text/html Onlinezugriff via DOI BK010053 XK010053 XK010000 Metadata rights reserved Springer special CC-BY-NC licence nationallicence 1 research-article jats NATIONALLICENCE NATIONALLICENCE NL-springer NATIONALLICENCE 856 40 https://doi.org/10.1007/s10663-014-9275-x text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Petrevski Goran Faculty of Economics, Saints Cyril and Methodius University, Goce Delchev Blvd. 9B, 1000, Skopje, Macedonia aut NATIONALLICENCE 700 1- Bogoev Jane Kuzman Josifovski Pitu 1, 1000, Skopje, Macedonia aut NATIONALLICENCE 700 1- Tevdovski Dragan Faculty of Economics, Saints Cyril and Methodius University, Goce Delchev Blvd. 9B, 1000, Skopje, Macedonia aut NATIONALLICENCE 773 0- Empirica Springer US; http://www.springer-ny.com 42/4(2015-11-01), 747-767 0340-8744 42:4<747 2015 42 10663