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Why Have Some Monetary Reforms Succeeded and Others Not? - An Empirical Assessment

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  • Andreas Freytag

Abstract

Monetary history is characterised by crisis and reform. The paper is dedicated to an explanation of what makes monetary reforms successful. A cross--sectional exonometric analysis is schosen to deal wht this problem. It is based on a standard macroeconomic model of commitment and credibility. As the dependent variable, we calculate a post-reform inflation rate. the exogenous variables are the degree of legal commitment and the constraining influence of institutions. The paper allows for the conclusion that monetray commitment, the consideration of institutional constraints and abstinence from the money press are crucial for the success of a monetary reform.

Suggested Citation

  • Andreas Freytag, 2001. "Why Have Some Monetary Reforms Succeeded and Others Not? - An Empirical Assessment," IWP Discussion Paper Series 04/2001, Institute for Economic Policy, Cologne, Germany.
    • Handle: RePEc:kln:iwpdip:dp04/01
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    References listed on IDEAS

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    7. Mr. Adam Bennett, 1993. "The Operation of the Estonian Currency Board," IMF Policy Discussion Papers 1992/003, International Monetary Fund.
    8. Mr. Adam Bennett, 1994. "Currency Boards: Issues and Experiences," IMF Policy Discussion Papers 1994/018, International Monetary Fund.
    9. Anonymous, 1962. "International Monetary Fund," International Organization, Cambridge University Press, vol. 16(4), pages 876-878, October.
    10. Bruno, M., 1991. "High Inflation and the Nominal Anchors of an Open Economy," Princeton Studies in International Economics 183, International Economics Section, Departement of Economics Princeton University,.
    11. Pierre L. Siklos (ed.), 1995. "Great Inflations of the 20th Century," Books, Edward Elgar Publishing, number 546.
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    Cited by:

    1. Andreas Freytag, 2001. "Does central bank independence reflect monetary commitment properly? Methodical considerations," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 54(217), pages 181-208.

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    More about this item

    Keywords

    Monetary Reforms; Credibility; Commitment; Institutions;
    All these keywords.

    JEL classification:

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

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