What Explains Persistent Inflation Differentials Across Transition Economies?
Panel estimates based on 19 transition economies suggests that some central banks may aim at comparatively high inflation rates mainly to make up for, and to perhaps exploit, lagging internal and external liberalization in their economies. Out-of-sample forecasts, based on expected developments in the underlying structure of these economies, and assuming no changes in institutions, suggest that incentives may be diminishing, but not to the point where inflation levels below 5 percent could credibly be announced as targets. Greater economic liberalization would help reduce incentives for higher inflation, and enhancements to central bank independence could help shield these central banks from pressures.
|Date of creation:||Aug 2007|
|Date of revision:|
|Contact details of provider:|| Postal: Kiellinie 66, D-24105 Kiel|
Phone: +49 431 8814-1
Fax: +49 431 85853
Web page: http://www.ifw-kiel.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Shigenori Shiratsuka, 1999. "Measurement errors and quality-adjustment methodology: lessons from the Japanese CPI," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q II, pages 2-13.
- Filer, Randall K. & Hanousek, Jan, 2003. "Inflationary bias in middle to late transition Czech Republic," Economic Systems, Elsevier, vol. 27(4), pages 367-376, December.
- Steven F. Kreft & Elham Mafi-Kreft, 2004.
"Importing Credible Monetary Policy: A Way for Transition Economies to Fight Inflation?,"
2004-17, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Mafi-Kreft, Elham & Kreft, Steven F., 2006. "Importing credible monetary policy: A way for transition economies to fight inflation?," Economics Letters, Elsevier, vol. 92(1), pages 1-6, July.
- Égert, Balázs & Halpern, László & MacDonald, Ronald, 2004.
"Equilibrium Exchange Rates in Transition Economies: Taking Stock of the Issues,"
CEPR Discussion Papers
4809, C.E.P.R. Discussion Papers.
- Balázs Égert & László Halpern & Ronald MacDonald, 2006. "Equilibrium Exchange Rates in Transition Economies: Taking Stock of the Issues ," Journal of Economic Surveys, Wiley Blackwell, vol. 20(2), pages 257-324, 04.
- Balázs Égert, & László Halpern & Ronald MacDonald, 2005. "Equilibrium Exchange Rates in Transition Economies: Taking Stock of the Issues," William Davidson Institute Working Papers Series wp793, William Davidson Institute at the University of Michigan.
- Balázs Égert & László Halpern & Ronald MacDonald, 2005. "Equilibrium Exchange Rates in T ransition Economies: T aking Stock of the Issues," Working Papers 106, Oesterreichische Nationalbank (Austrian Central Bank).
- David Romer, 1991.
"Openness and inflation: theory and evidence,"
Federal Reserve Bank of San Francisco, issue Nov.
- Cukierman, Alex & Miller, Geoffrey P. & Neyapti, Bilin, 2002.
"Central bank reform, liberalization and inflation in transition economies--an international perspective,"
Journal of Monetary Economics,
Elsevier, vol. 49(2), pages 237-264, March.
- Cukierman, A. & Miller, G.P. & Neyapti, B., 2000. "Central Bank Rerform, Liberalization and Inflation in Transition Economies - an International Perspective," Papers 2000-19, Tel Aviv.
- Cukierman, A. & Miller, G.P. & Neyapti, B., 2000. "Central Bank Rerform, Liberalization and Inflation in Transition Economies - an International Perspective," Papers 00-19, Tel Aviv.
- Cukierman, A. & Miller, G.P. & Neyapti, B., 2000. "Central Bank Reform, Liberalization and Inflation in Transition Economies : An International Perspective," Discussion Paper 2000-106, Tilburg University, Center for Economic Research.
- Cukierman, Alex & Miller, Geoffrey & Neyapti, Bilin, 2001. "Central Bank Reform, Liberalization and Inflation in Transition Economies - An International Perspective," CEPR Discussion Papers 2808, C.E.P.R. Discussion Papers.
- Manuel Arellano & Stephen Bond, 1991.
"Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations,"
Review of Economic Studies,
Oxford University Press, vol. 58(2), pages 277-297.
- Tom Doan, . "RATS program to replicate Arellano-Bond 1991 dynamic panel," Statistical Software Components RTZ00169, Boston College Department of Economics.
- Richard Blundell & Steve Bond, 1995.
"Initial conditions and moment restrictions in dynamic panel data models,"
IFS Working Papers
W95/17, Institute for Fiscal Studies.
- Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
- Blundell, R. & Bond, S., 1995. "Initial Conditions and Moment Restrictions in Dynamic Panel Data Models," Economics Papers 104, Economics Group, Nuffield College, University of Oxford.
- R Blundell & Steven Bond, . "Initial conditions and moment restrictions in dynamic panel data model," Economics Papers W14&104., Economics Group, Nuffield College, University of Oxford.
- Aisen, Ari & Veiga, Francisco Jose, 2006.
"Does Political Instability Lead to Higher Inflation? A Panel Data Analysis,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 38(5), pages 1379-1389, August.
- Ari Aisen & Francisco JosÃ© Veiga, 2005. "Does Political Instability Lead to Higher Inflation? A Panel Data Analysis," IMF Working Papers 05/49, International Monetary Fund.
- David Roodman, 2006. "How to Do xtabond2," North American Stata Users' Group Meetings 2006 8, Stata Users Group.
- Vdovichenko, Anna G. & Voronina, Victoria G., 2006. "Monetary policy rules and their application in Russia," Research in International Business and Finance, Elsevier, vol. 20(2), pages 145-162, June.
- Eduardo Levy Yeyati, 2006.
"Financial dollarization: evaluating the consequences,"
CEPR;CES;MSH, vol. 21(45), pages 61-118, 01.
- Eduardo Levy Yeyati, 2005. "Financial Dollarisation: Evaluating The Consequences," Business School Working Papers findollarisation, Universidad Torcuato Di Tella.
- Eduardo Levy-Yeyati, 2004. "FINANCIAL DOLLARIZATION: Evaluating the consequences," Econometric Society 2004 Latin American Meetings 184, Econometric Society.
- Boriss Siliverstovs & Olena Bilan, 2005. "Modeling Inflation Dynamics in Transition Economies: The Case of Ukraine," Eastern European Economics, Taylor & Francis Journals, vol. 43(6), pages 66-81, December.
- Alastair Cunningham, 1996. "Measurement Bias in Price Indices: An Application to the UK's RPI," Bank of England working papers 47, Bank of England.
- Randall K. Filer & Jan Hanousek, 2003. "Inflationary Bias in Mid to Late Transition Czech Republic," Development and Comp Systems 0306001, EconWPA.
- Robert J. Gordon, 2006.
"The Boskin Commission Report: A Retrospective One Decade Later,"
International Productivity Monitor,
Centre for the Study of Living Standards, vol. 12, pages 7-22, Spring.
- Robert J. Gordon, 2006. "The Boskin Commission Report: A Retrospective One Decade Later," NBER Working Papers 12311, National Bureau of Economic Research, Inc.
- Stock, James H & Wright, Jonathan H & Yogo, Motohiro, 2002. "A Survey of Weak Instruments and Weak Identification in Generalized Method of Moments," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(4), pages 518-29, October.
- Edwards, Sebastian, 2001. "Dollarization: Myths and realities," Journal of Policy Modeling, Elsevier, vol. 23(3), pages 249-265, April.
- Alex Cukierman & Sebastian Edwards & Guido Tabellini, 1989.
"Seigniorage and Political Instability,"
NBER Working Papers
3199, National Bureau of Economic Research, Inc.
- Barro, Robert J & Gordon, David B, 1983.
"A Positive Theory of Monetary Policy in a Natural Rate Model,"
Journal of Political Economy,
University of Chicago Press, vol. 91(4), pages 589-610, August.
- Robert J. Barro & David B. Gordon, 1981. "A Positive Theory of Monetary Policy in a Natural-Rate Model," NBER Working Papers 0807, National Bureau of Economic Research, Inc.
- Kenneth S. Rogoff, 2003.
"Globalization and global disinflation,"
Proceedings - Economic Policy Symposium - Jackson Hole,
Federal Reserve Bank of Kansas City, pages 77-112.
- Randall K. Filer & Jan Hanousek, 2001.
"Output Changes and Inflationary Bias in Transition,"
- Jan Hanousek & Randall K. Filer, 2000. "Output Changes and Inflationary Bias in Transition," CERGE-EI Working Papers wp167, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
- Pelipas, Igor, 2006. "Money demand and inflation in Belarus: Evidence from cointegrated VAR," Research in International Business and Finance, Elsevier, vol. 20(2), pages 200-214, June.
- Carlo Cottarelli, 1998. "The Nonmonetary Determinants of Inflation; A Panel Data Study," IMF Working Papers 98/23, International Monetary Fund.
- Robert J. Gordon, 2000. "The Boskin Commission Report and its Aftermath," NBER Working Papers 7759, National Bureau of Economic Research, Inc.
- Philippe Egoume Bossogo & Jerald A Schiff & Miho Ihara & Tetsuya Konuki & Kornelia Krajnyak, 2006. "Labor Market Performance in Transition; The Experience of Central and Eastern European Countries," IMF Occasional Papers 248, International Monetary Fund.
- Bogdan Lissovolik, 2003. "Determinants of Inflation in a Transition Economy; The Case of Ukraine," IMF Working Papers 03/126, International Monetary Fund.
- Rodriguez-Palenzuela, Diego & Camba-Méndez, Gonzalo & García, Juan Angel, 2003. "Relevant economic issues concerning the optimal rate of inflation," Working Paper Series 0278, European Central Bank.
- Allan Crawford, 1998. "Measurement biases in the Canadian CPI: An update," Bank of Canada Review, Bank of Canada, vol. 1998(Spring), pages 39-56.
- Michael Keen & Alexander D Klemm & Anna Ivanova, 2005.
"The Russian Flat Tax Reform,"
IMF Working Papers
05/16, International Monetary Fund.
When requesting a correction, please mention this item's handle: RePEc:kie:kieliw:1373. 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: (Dieter Stribny)
If references are entirely missing, you can add them using this form.