Studies In Selective Credit Policies

Author : Mihovil Andelinovic
Publisher :
ISBN 13 :
Total Pages : 15 pages
Book Rating : 4.:/5 (13 download)

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Download or read book The Need for Selective Credit Policy Implementation written by Mihovil Andelinovic and published by . This book was released on 2013 with total page 15 pages. Available in PDF, EPUB and Kindle. Book excerpt: The aim of this paper is to explore the economic circumstances in which the selective credit policy, the least used instrument of four types of instruments on disposal to central banks, should be used and to analyze the possibility to implement such policy in Croatia. The most significant example includes the use of selective credit policies in response to the emergence of the global financial crisis by the FED. Specifics of the potential use of selective credit policies as the instigator of economic growth in Croatia, the small open economy, are determined by high eurisation of financial system, fixed exchange rate and long-term trend growth of external debt that is related to the need to maintain high levels of foreign reserves. In such conditions, the classic forms of selective credit policies are unsuitable for the introduction. Several alternative approaches to implement selective credit policies are examined in this paper. Also thorough analysis about distribution of selective monetary policy loans among economic sectors in Croatia is conducted in order to minimize the risk of investing funds and maximize the return in order to influence the GDP growth. For the purpose of this paper, authors analyse the movement of sales within economic sectors and the movement of gross value added within economic sectors in order to optimize the distribution of selective monetary policy loans among economic sectors. The results of the research suggest that the releasing of than 1 billion € of its international reserves through direct placements into selected economic sectors might impact the GDP growth of 3,23% p.a.