The stationarity of inflation in Croatia: anti-inflation stabilization program and the change in persistence

摘要

This study examines the impact of the anti-inflation stabilization policies on the behavior of inflation in Croatia in the early 1990s and through the subsequent post-stabilization period using fractional integration techniques. Indeed, the implementation of the stabilization program in October 1993 brought immediate deflation with a relative high degree of inflation stability in the post-stabilization period. With allowance for a structural break corresponding to the stabilization program in October 1993, the degree of persistence was substantially reduced with the fractional differencing parameter being positive but close to zero in the post-stabilization period.