IDEAS home Printed from https://ideas.repec.org/a/ibl/journl/v2y2008i1p23-32.html
   My bibliography  Save this article

Accommodating Monetary Policy in Transitional Economies: Particularities

Author

Listed:
  • Tatiana Papiashvili

    () (International Black Sea University)

  • Faruk Gürsoy

    () (International Black Sea University)

Abstract

This paper surveys the particularities of monetary policy as a powerful governmental weapon in countries with transitional economies. The paper combines the theoretical analysis with empirical studies. Because in transitional economies the particular channels of monetary policy are diverse, continually changing, and uncertain reduce-form evidence are used to evaluate the empirical evidence. The brief view of relationships between movement in money supply (M1 and M2) and output level (nominal GDP) in Georgia illustrates the close correlation between them. Georgian economy like others transitional economies suffers from "Great Transitional Depression" and macroeconomic equilibrium occurs at recessionary gap. In transition countries initially supply is more elastic and elasticity increases more rapidly than that in developed countries. In these circumstances expansionary monetary policy effects real aggregate economy stimulating economic growth with mild inflation. In industrialized countries accommodating discretionary monetary policy entails cost-push inflation without any change in long-run GDP.

Suggested Citation

  • Tatiana Papiashvili & Faruk Gürsoy, 2008. "Accommodating Monetary Policy in Transitional Economies: Particularities," IBSU Scientific Journal, International Black Sea University, vol. 2(1), pages 23-32.
  • Handle: RePEc:ibl:journl:v:2:y:2008:i:1:p:23-32
    as

    Download full text from publisher

    File URL: https://journal.ibsu.edu.ge/index.php/ibsusj/article/download/49/42
    Download Restriction: no

    References listed on IDEAS

    as
    1. Rzońca, Andrzej & Ciżkowicz, Piotr, 2005. "Non-Keynesian effects of fiscal contraction in new member states," Working Paper Series 519, European Central Bank.
    2. Piotr Bujak & Joanna Siwinska-Gorzelak, 2003. "Short-run Macroeconomic Effects of Discretionary Fiscal Policy Changes," CASE Network Studies and Analyses 0261, CASE-Center for Social and Economic Research.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    monetary policy; transitional economy; reduce-form evidence; long-run economic growth; inflation;

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibl:journl:v:2:y:2008:i:1:p:23-32. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Salavat Sayfullin). General contact details of provider: http://edirc.repec.org/data/feibsge.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.