This year’s first issue of Public Sector Economics starts with two winning entries from the 2025 Hanžeković Foundation Competition for papers in public sector economics, and then brings a thematic part that analyses the international monetary system and exchange rate issues on multiple levels. 

The regular award in the 2025 Hanžeković Competition went to Frane Banić and Guzmán González-Torres for their paper Different strokes for different folks: untangling supply and demand shocks using survey-data to assess sectoral inflationary pressures in Croatia, which provides new insights into the behaviour of inflation in the smaller economies of the euro area.

The student award went to Jakov Čorak and Mihael Brusan for their paper Inflation in Croatia: a new era of forecasting with machine learning, which applies ten models and four groups of input features to forecast inflation across different time horizons.

The contributions in the thematic part move from structural foundations of the international monetary system, including why the dollar matters, to the transmission of shocks through exchange rates to debt, inflation and growth, and then to policies that shape macroeconomic outcomes under normal and extraordinary conditions, such as foreign exchange buffers and central bank communication.

Aaron Mehrotra examines in Public debt and the dollar one of the key transmission channels of dollar dominance, namely sovereign debt dynamics. Using a large cross-country panel, the paper shows that periods of US dollar appreciation are associated with higher public debt ratios over the medium term.

Sergii Sheludko`s paper When the guns roar: how the war, reserves and exports shape Ukraine's cost of external borrowing shows on the example of Ukraine that military conflict sharply increases sovereign borrowing costs, while international reserves play a crucial stabilising role by narrowing spreads even in circumstances of war.

Juan Camilo Anzoátegui Zapata, Danilo Rodríguez Arango and Sergio David Sánchez Varela analyse in the paper Effects of reputation and monetary policy communication on exchange rate uncertainty: evidence from an emerging market economy how in Colombia an enhanced central bank reputation, clearer policy communication, and unanimous decision making significantly reduce exchange rate uncertainty, which is measured through disagreements in exchange rate expectations and exchange rate forecast errors.

Samson Edo and Eseosa Joy Sowemimo shift attention in the paper Currency depreciation and inflationary pressure vis-à-vis monetary intervention: perspectives on growth and policy implications to how exchange rate movements, often driven by global dollar cycles, affect economic growth in Sub-Saharan African countries. The study finds that currency depreciation and inflation exert a strong negative impact on growth, contradicting the simplistic view that depreciation boosts growth by raising export competitiveness.

This issue ends with a review of Kenneth Rogoff`s latest book Our Dollar, Your Problem by Mislav Brkić.