Leveraging the unique setting of unilateral euroisation, this paper examines the spillover effects of euro area monetary policy on Montenegro and Kosovo. Through the lens of a structural VAR model with block exogeneity, it shows that euro area monetary policy shocks can significantly influence output and inflation in these economies, albeit with a delayed response, while contributing only modestly to their overall business cycle fluctuations.
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Georgi Krustev (2026) studied this question.
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