%0 Journal Article
	%A Elza Jurun and  Damir Piplica and  Tea Poklepović
	%D 2014
	%J International Journal of Economics and Management Engineering
	%B World Academy of Science, Engineering and Technology
	%I Open Science Index 87, 2014
	%T Inflation and Unemployment Rates as Indicators of the Transition European Union Countries Monetary Policy Orientation
	%U https://publications.waset.org/pdf/9997764
	%V 87
	%X Numerous studies carried out in the developed 
western democratic countries have shown that the ideological 
framework of the governing party has a significant influence on the 
monetary policy. The executive authority consisting of a left-wing 
party gives a higher weight to unemployment suppression and central 
bank implements a more expansionary monetary policy. On the other 
hand, right-wing governing party considers the monetary stability to 
be more important than unemployment suppression and in such a 
political framework the main macroeconomic objective becomes the 
inflation rate reduction. The political framework conditions in the 
transition countries which are new European Union (EU) members 
are still highly specific in relation to the other EU member countries. 
In the focus of this paper is the question whether the same 
monetary policy principles are valid in these transitional countries as 
well as they apply in developed western democratic EU member 
countries. The data base consists of inflation rate and unemployment 
rate for 11 transitional EU member countries covering the period 
from 2001 to 2012. The essential information for each of these 11 
countries and for each year of the observed period is right or left 
political orientation of the ruling party. 
In this paper we use t-statistics to test our hypothesis that there are 
differences in inflation and unemployment between right and left 
political orientation of the governing party. To explore the influence 
of different countries, through years and different political 
orientations descriptive statistics is used. Inflation and unemployment 
should be strongly negatively correlated through time, which is tested 
using Pearson correlation coefficient. 
Regarding the fact whether the governing authority is consisted 
from left or right politically oriented parties, monetary authorities 
will adjust its policy setting the higher priority on lower inflation or 
unemployment reduction. 



	%P 725 - 731