Cyclical Determinants of Inflation, Model Uncertainty, and Financial Stability in the European Union - MacroInflation

About the project

This project explores the links between inflation, economic cycles, and financial stability in the European Union, with a particular focus on the challenges arising from uncertainty in economic assessment. In a period marked by frequent crises, shifts in monetary policy, and persistent differences among EU Member States, understanding these dynamics is essential for achieving stable and sustainable economic development.

The project consists of five closely connected studies. The first two examine how economic uncertainty evolves over the business cycle and whether this uncertainty can serve as an early signal of economic slowdowns or recoveries. The following studies focus on cross-country differences within the euro area in how changes in interest rates and economic conditions affect inflation, helping to explain why a single monetary policy does not have uniform effects across all countries. The final study addresses financial stability by analysing differences between core and peripheral EU countries, with particular attention to the role of the banking sector and international investment flows.

The project’s findings will contribute to a deeper understanding of economic dynamics in the European Union and provide valuable insights for policymakers, the academic community, and the general public. Ultimately, the project aims to support stronger economic stability and greater resilience of European economies in an increasingly uncertain global environment.

Total project value: 73.079,24 EUR

Project duration: October 1, 2025 until September 30, 2029

Project holder: University of Zagreb, Faculty of Economics & Business

Contact

Project leader: Associate Proffesor Vladimir Arčabić, PhD

E-mail: varcabic@efzg.hr

Address: Faculty of Economics & Business – Zagreb

     Trg J. F. Kennedyja 6

     10000 Zagreb, CROATIA