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The Output-Inflation Nexus in Ukraine; Is there a Trade-Off?


  • Atish R. Ghosh


This paper examines whether expansionary credit policy can help sustain output growth in transition economies, with particular reference to Ukraine’s experience since 1992. We find that, while real credit growth is indeed associated with higher output growth, an increase in the growth rate of nominal credit does not, in general equilibrium, stimulate output growth. Following a short-lived boom — caused by falling real wages — the increase in the growth rate of nominal credit leads to a decline in the level of output.

Suggested Citation

  • Atish R. Ghosh, 1996. "The Output-Inflation Nexus in Ukraine; Is there a Trade-Off?," IMF Working Papers 96/46, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:96/46

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    References listed on IDEAS

    1. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    2. Joshua Greene & Delano Villanueva, 1991. "Private Investment in Developing Countries: An Empirical Analysis," IMF Staff Papers, Palgrave Macmillan, vol. 38(1), pages 33-58, March.
    3. Melvyn Weeks & Mark R. Stone, 2001. "Systemic Financial Crises, Balance Sheets, and Model Uncertainity," IMF Working Papers 01/162, International Monetary Fund.
    4. Mohsin S. Khan & Manmohan S. Kumar, 1993. "Public and Private Investment and the Convergence of Per Capita Incomes in Developing Countries," IMF Working Papers 93/51, International Monetary Fund.
    5. Se-Jik Kim & Mark R. Stone, 1999. "Corporate Leverage, Bankruptcy, and Output Adjustment in Post-Crisis East Asia," IMF Working Papers 99/143, International Monetary Fund.
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    Cited by:

    1. Era Dabla-Norris & Holger Floerkemeier, 2006. "Transmission Mechanisms of Monetary Policy in Armenia; Evidence from VAR Analysis," IMF Working Papers 06/248, International Monetary Fund.
    2. Starr, Martha A., 2005. "Does money matter in the CIS? Effects of monetary policy on output and prices," Journal of Comparative Economics, Elsevier, vol. 33(3), pages 441-461, September.


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