12th Dubrovnik Economic Conference Symposium.

Wachtel, Paul ; Vujcic, Boris

The Croatian National Bank's annual Dubrovnik conferences are a mainstay for research on economies in transition and the problems that they share with other emerging market countries. The 12th Dubrovnik Economic Conference was held on 28 June-1 July, 2006. Twelve research papers were presented on various topics in financial economics including credit growth, current account imbalances, asset prices and monetary policy, foreign direct investment and banking sector changes. This symposium includes a selection of those papers that were revised after the conference, refereed by two anonymous readers and reviewed by the editors. We are pleased to present seven papers from the 12th Dubrovnik Economic Conference in this symposium.

The Dubrovnik Economic Conference was truly an innovation in the research and central banking communities of the transition economies when it was first started in 1995. It was one of the first venues for academic discussion of transition issues and brought together economists from all over the world with an interest in the transition phenomenon. In recent years, there has been an enormous increase in research activity by economists in the transition economies. As a result, the 12th conference introduced a new component--a workshop focused on research done by young Croatian economists, which was organised by Randall Filer. One of the papers presented at the workshop is included in this symposium. Thus, the Dubrovnik Economic Conference tradition of innovative and quality research is evolving to reflect changes in the region.

The 12th Dubrovnik Economic Conference was organised by a scientific committee chaired by Zeljko Rohatinski, the Governor of the Croatian National Bank, and including Boris Vujcic, Deputy Governor of the Croatian National Bank, Mario I. Blejer, Director of the Centre for Central Banking Studies at the Bank of England, Jacob A. Frenkel, Vice Chairman of the American International Group, Inc. and Paul Wachtel, Professor of Economics at the Leonard N. Stern School of Business at New York University. In addition, the success of the conference owes much to the efforts of Tomislav Presecan, Vice Governor of the Croatian National Bank and chairman of the organising committee. The pre-conference workshop was organised by Randall Filer, Professor of Economics, Hunter College of the City University of New York and CERGE and Paul Wachtel.

The conference papers benefited from comments from the conference discussants and at least one anonymous referee for each paper. The discussants in Dubrovnik were Stephen G. Cecchetti, Allen Deardorff, Randall K. Filer, Oleh Havrylyshyn, Evzen Kocenda, Maroje Lang, Neven Mates, Piroska M. Nagy, Sandra Svaljek, Gordi Susic, Athanasios Vamvakidis and Maxwell Watson.

As befits a conference hosted by the central bank, many of the papers presented below address monetary policy concerns. Mario Blejer reviews the current worldwide asset price 'bubble' and concludes that it reflects fundamental changes in asset supply and demand and is therefore should not be a matter of concern for central bankers. Two additional papers look at particular aspects of asset price and lending booms in transition countries. Evan Kraft looks at lending booms and Balazs Egert and Dubravko Mihaljek examine housing prices. Banking issues are addressed in the next two papers, which use new data sets. Sven Blank and Claudia M. Buch show that the introduction of the Euro has influenced cross-border banking activity. Rainer Haselmann and Paul Wachtel use a new EBRD survey to examine the risk taking and risk management behaviour of banks in transition countries. Ali Kutan and Goran Vuksic study the influence of the FDI inflows into the transition countries. The paper by Adi Brender and Alan Drazen turns to fiscal policy and its relationship to election cycles and the strength of democracies.

PAUL WACHTEL (1) & BORIS VUJCIC (2)

(1) Stern School of Business, New York University, 44 West 4th Street, New York, NY 10012-1126, USA. E-mail: Pwachtel@stern.nyu.edu

(2) Croatian National Bank, Trg hrvatskih velikana 3, Zagreb 10002, Croatia. E-mail: bvujcic@hnb.hr