Reducing Inflation: Lessons From Albania's Early Success

By C. McNeilly, Doris Schiesser-Gachnang

May 1, 1998

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C. McNeilly, and Doris Schiesser-Gachnang. Reducing Inflation: Lessons From Albania's Early Success, (USA: International Monetary Fund, 1998) accessed September 18, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Inflation in Albania fell rapidly once comprehensive stabilization policies and market-oriented reforms were launched, in contrast to other transition economies, where price liberalization was generally followed by persistently high inflation. The early reduction of underlying inflation is confirmed by trimmed mean estimates of core inflation, which use a central portion of the commodity-wise inflation distribution. This also demonstrates the usefulness of estimating core inflation for transition economies. The early success in curbing inflation is attributed to the extremely broad scope of initial price liberalization coupled with key supporting measures. It also gives hope for early recovery from Albania’s 1997 economic crisis.

Subject: Consumer price indexes, Consumption, Inflation, National accounts, Price adjustments, Price controls, Prices

Keywords: Albania, Baltics, Consumer price indexes, Consumption, CPI, Eastern Europe, Europe, Food price development, Inflation, Inflation distribution, Inflation in Albania, Mortgage cost, Price, Price adjustments, Price controls, Price liberalization, Price movement, Price signal, Price subsidy, Price variability, Recovery level, Services price development, Underlying inflation, WP

Publication Details

Pages:

49
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1998/078
Stock No:

WPIEA0781998
ISBN:

9781451956313
ISSN:

1018-5941

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