Fiscal Deficits, Monetary Reform and Inflation: The Case of Romania
The main objective of this paper is to explain the phenomena of persistent inflation in Romania through the use of a simple empirical model which highlights the links between inflation and the government budget deficit. We discuss the importance of using a proper definition of the public sector when calculating the public sector deficit and illustrate the impact of using different measures of public sector deficits on the assessment of consistency between monetary and fiscal policy. We then discuss the effect of switching to market interest rates on domestic debt as well as the impact of real exchange rate depreciation and financial sector reform on the financeable deficit and the required deficit reduction for given inflation targets.
|Date of creation:||Sep 1996|
|Contact details of provider:|| Postal: Josefstädterstr. 39, A-1080 Vienna, Austria|
Phone: ++43 - (0)1 - 599 91 - 0
Fax: ++43 - (0)1 - 599 91 - 555
Web page: http://www.ihs.ac.at
More information through EDIRC
|Order Information:|| Postal: Institute for Advanced Studies - Library, Josefstädterstr. 39, A-1080 Vienna, Austria|
When requesting a correction, please mention this item's handle: RePEc:ihs:ihsrop:37. 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: (Doris Szoncsitz)
If references are entirely missing, you can add them using this form.