Mundell Fleming model – primer Srbije

The economic crisis in Serbia is typically balance of payment crisis which is not directly connected with global economic crisis. Under attack of global economic crisis current problems of Serbian economy has become more distinctive. This accelerated course and effect reactions. Reduced capital inflows could not cover deficit of current transactions any more. Serbian economy is in recession phase. Previously high rates of GDP had been generated because of high level of aggregate demand. In situation where economic recession is obvious, it is necessary to check once again measures of monetary and fiscal policy and this is the objective of this paper.