Financialisation in the post-yugoslav region: Monetary policy, credit money and dollarization

Abstract

This paper considers long term processes of financialisation in the former and post-Yugoslavia. Regional monetary policy has since the 1980s defended the value of credit money in order to facilitate international capital flows. It is argued that the monetary system of fixed exchange rates, inflation targeting and capital account liberalisation has institutionalised the subordinate financialisation and dollarization of the region. However the origins of dollarization are found in the historic dependency of the productive sector on foreign currency credit imports.