Monetary Policy Credibility and Economic Convergence toward the European Union: Evidence From, Albania

This study examines the relationship between monetary policy credibility and Albania’s economic convergence toward the European Union. The research investigates how key monetary policy indicators contribute to macroeconomic stability and support the country’s alignment with EU economic standards. The empirical analysis is based on annual macroeconomic data covering the period 2005–2025, obtained from the Bank of Albania, INSTAT, the World Bank, and Eurostat. A multiple linear regression model is employed to evaluate the effects of inflation, the policy interest rate, and the ALL/EUR exchange rate on GDP growth. The findings suggest that maintaining low inflation and exchange rate stability contributes to a more predictable macroeconomic environment, while institutional independence, transparency, and policy consistency strengthen monetary policy credibility. The study contributes to the literature by providing empirical evidence on the role of credible monetary policy in supporting macroeconomic stability and Albania’s European integration process.