The Impact of the War 1991: 1995 on the Croatian Economy: A Contribution to the Analysis of War Economies

The economics of the Croatian war differ considerably from what is often thought of as typical features of a war economy. Most strikingly, while wars are often perceived as generating a tendency towards repressed inflation and a command economy the Croatian economy actually moved in the opposite direction. Croatia "nevertheless" won the war. This has prompted some to think of the war as matter of minor relevance for Croatian economic development in the nineties. The paper argues that this view is mistaken. Croatia offers an opportunity to reconsider the macroeconomics of regional wars. This reconsideration demonstrates the power of the new classical framework.