20.500.12556/RUL-181655 At the crossroads of inflation analyzing Central Bank responses in noneconomic crises Purpose: This study aims to thoroughly investigate the complexity of inflation dynamics in the context of two significant global crises, the COVID-19 pandemic and the ongoing geopolitical tensions in Ukraine. The primary goal is to examine the effects of several factors, such as interest rates, currency indices and unemployment, on inflation during extended periods of noneconomic crises. Design/methodology/approach: This research uses a comprehensive data set spanning 75 months across the USA and the Euro Area, using the Generalized Method of Moments two-step regression methodology for analysis. The study examines the relationships between interest rates, currency indices, unemployment and inflation during extended noneconomic (financial) crises. This rigorous approach offers a nuanced understanding of how these factors interact and influence inflation. Findings: The study highlights the crucial role of interest rates in controlling inflation during crises. Specifically, an interest rate increase of over 1.75% negatively impacts inflation, with more substantial rate hikes having a faster effect. The analysis reveals a minimal correlation between currency devaluation and inflation, emphasizing the predominant influence of interest rates. In addition, a notable negative correlation between unemployment and inflation is observed, indicating that higher unemployment rates tend to coincide with lower inflation levels. Practical implications: The study’s findings offer valuable insights for central banks and policymakers tasked with managing inflation in times of crisis. By underscoring the effectiveness of interest rate adjustments and the limited influence of currency depreciation, this research provides critical guidance for formulating effective monetary policy during economic challenges. Originality/value: This study contributes to existing literature by providing a comprehensive analysis of inflation dynamics during noneconomic crises, using a robust database and using advanced econometric techniques. The findings: provide new insights into the role of interest rates, currency indices and unemployment in shaping inflation dynamics in times of noneconomic crises. These findings enhance the understanding of monetary policy strategies in challenging economic environments. central banks interest rate level of employment inflation rate interest rates currency index unemployment non-economic crises centralne banke obrestna mera zaposlenost true false true Angleški jezik Slovenski jezik Članek v reviji 2026-04-10 14:09:05 2026-04-10 14:11:18 2026-04-13 04:41:58 0000-00-00 00:00:00 2025 0 0 Str. 468-488 iss. 3 Vol. 42 2025 0000-00-00 PostprintKoncna Objavljeno NiDoloceno 0000-00-00 0000-00-00 0000-00-00 336.71 1086-7376 10.1108/SEF-04-2024-0246 217103107 Bajra_et_al_2025_SFE.pdf Bajra_et_al_2025_SFE.pdf 1 15325B3BC5988316071574ACA493BD6C b490b635bc35219d9969861e516f4c86179fe534eae849a589263639c94df8f6 0e5a539f-34d6-11f1-b0ab-0050569b8976 https://repozitorij.uni-lj.si/Dokument.php?lang=slv&id=232307 https://www.emerald.com/sef/article/42/3/468/1264283/At-the-crossroads-of-inflation-analyzing-Central 0 16c03c9c-34d6-11f1-b0ab-0050569b8976 https://repozitorij.uni-lj.si/Dokument.php?lang=slv&id=232308 Ekonomska fakulteta 0 0 0