Stabilization and Growth in Transition Economies: The Early Experience
AbstractThis paper analyzes the growth and stabilization experience in 26 transition economies in eastern Europe, the former Soviet Union, and Mongolia for the period 1989-1994. Inflation rates have declined significantly in most countries following an inflation stabilization program. Growth resumes after stabilization occurs, typically with a lag of about two years. Reducing inflation thus appears to be a precondition for growth. An econometric analysis of the short-run determinants of inflation and growth illustrates the key roles of fixed exchange rates, improved fiscal balances, and structural reforms in spurring growth and lowering inflation, and confirms that inflation stabilization programs have been beneficial for growth even after controlling for structural reforms.
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Bibliographic InfoArticle provided by N.P. Redaktsiya zhurnala "Voprosy Economiki" in its journal Voprosy Economiki.
Volume (Year): 5 (1997)
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Other versions of this item:
- Stanley Fischer & Ratna Sahay & Carlos A. Vegh, 1996. "Stabilization and Growth in Transition Economies: The Early Experience," Journal of Economic Perspectives, American Economic Association, vol. 10(2), pages 45-66, Spring.
- Stanley Fischer & Carlos A. VÃ©gh Gramont & Ratna Sahay, 1996. "Stabilization and Growth in Transition Economies - The Early Experience," IMF Working Papers 96/31, International Monetary Fund.
- Fischer, Stanley & Sahay, Ratna & Vegh, Carlos, 1996. "Stabilization and growth in transition economies: The early experience," MPRA Paper 20631, University Library of Munich, Germany.
- P20 - Economic Systems - - Socialist Systems and Transition Economies - - - General
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