MAKROEKONOMSKO PRILAGOĐAVANJE POD UTICAJEM EKSTERNIH ŠOKOVA: SLUČAJ PERIFERIJE EVRO-ZONE I ČLANICA EFTA
MACROECONOMIC ADJUSTMENTS UNDER THE IMPACT OF EXTERNAL SHOCKS: THE CASE OF THE EURO-ZONE PERIPHERY AND EFTA MEMBERS

Summary/Abstract: In the circumstances of global economic crisis and the accompanying external shocks, adjustment macro-mechanisms between economies differ depending on the adopted monetary framework. This research aims to highlight the difference between the Eurozone (EZ) member states which have sacrificed their monetary sovereignty and EFTA members, unwilling to deepen their economic integration and thus give up their monetary autonomy. The period examined is 2001Q1-2021Q1, covering two biggest external shocks in recent times – the Great Recession of 2008 and the 2020 Pandemic Crisis. Empirical findings are based at the estimation of panel VAR model for EFTA and the EZ periphery. The estimation results reveal the influence of two types of external shocks, current account (trade) and capital account (financial) shocks, to the variations of GDP and NEER. The findings confirm that monetary autonomy acts as a shield against external trade and financial shocks, while the vulnerable monetary union members suffer from higher and prolonged output losses.

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