Inflation and stabilization in transition economies: An analytical interpretation of the evidence
AbstractA simple model is developed to understand inflationary pressures and stabilization in non-market economies. It is shown that in the typical planned economy, the endogeneity of the money supply and the over-determination of the system (given that both prices and wages are set by the planners) imply that a permanent increase in wages leads to an ever-increasing monetary overhang. The model also suggests that price liberalization should lead to a price level overshooting provided that wages remain a nominal anchor. In light of the model, the paper reviews the inflation and stabilization experiences of several transition economies in Eastern Europe and the former Soviet Union. The paper concludes that (i) transition economies have suffered from essentially the same inflationary pressures as did planned economies, and (ii) the exchange rate has been more effective than money as a nominal anchor in reducing inflation
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Journal of Economic Policy Reform.
Volume (Year): 1 (1996)
Issue (Month): 1 ()
Contact details of provider:
Web page: http://www.tandfonline.com/GPRE19
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Barlow, David, 2010. "How did structural reform influence inflation in transition economies?," Economic Systems, Elsevier, vol. 34(2), pages 198-210, June.
- Guillermo A. Calvo & Carlos A. Vegh, 1999.
"Inflation Stabilization and BOP Crises in Developing Countries,"
NBER Working Papers
6925, National Bureau of Economic Research, Inc.
- Calvo, Guillermo A. & Vegh, Carlos A., 1999. "Inflation stabilization and bop crises in developing countries," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 24, pages 1531-1614 Elsevier.
- S. Fisher & R. Sahay & C. A. Vegh, 1997.
"Stabilization and Growth in Transition Economies: The Early Experience,"
N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 5.
- 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.
- Fischer, Stanley & Sahay, Ratna & Vegh, Carlos, 1996. "Stabilization and growth in transition economies: The early experience," MPRA Paper 20631, University Library of Munich, Germany.
- 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.
- Sulo Haderi & Harry Papapanagos & Peter Sanfey & Mirela Talka, 1996.
"Inflation and Stabilization in Albania,"
Studies in Economics
9613, Department of Economics, University of Kent.
- Ratna Sahay & Stanley Fischer & Carlos A. VÃ©gh Gramont, 1998.
"From Transition to Market - Evidence and Growth Prospects,"
IMF Working Papers
98/52, International Monetary Fund.
- Fischer, Stanley & Sahay, Ratna & Vegh, Carlos, 1998. "From transition to market: Evidence and growth prospects," MPRA Paper 20615, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.