Sarajčić, Sahrudin
January 2012
Business Consultant / Poslovni Konsultant;Jan2012, Vol. 4 Issue 16, p29
Academic Journal
In terms of the increased risk of spillovers from the market and government debt of countries with the euro area periphery to other countries, it is decisive implementation of fiscal policy and structural adjustment to reduce the sensitivity of the delay in capital inflows and encourage the acceleration of economic growth, and thus strengthen the confidence of financial markets about the solvency of the country. This paper analysis basic of determinant of capital flows with standpoints of recipient, analysing consequences of financial instability as well as a big deficit of current account of B&H which is mainly being financed through grants, transfers and foreign capital. In this paper, results of analysis shown that in the long term terms of financial instability as and without these compensations , currency board(CB) was to under great pressure. As favourable circumstances related to facts that the growth of indices of real effective exchange of rate don't take monetary authorities ,but only its economy. That is why the main part of countries in similar situation are being performed of measures of sterilisation to reduce of pressure of import of capital on the monetary basis and inflation.


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