Inflation and Money Demand in Albania

Author/Editor:

Sanja Kalra

Publication Date:

July 1, 1998

Electronic Access:

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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:

The paper uses a simple analytical framework to estimate relationships between prices, money the exchange rate, and interest rates in Albania during 1993–97. The estimated parsimonious error correction model extends the findings of a growing literature on inflation and money demand in transition economies. The results suggest that, after the one-time effects of the 1997 crisis are taken into account, the long-run determinants of inflation and money demand remained unchanged. Strong financial policies since mid—1997 appear to have helped to restore conditions for low inflation and stable money demand.

Series:

Working Paper No. 1998/101

Subject:

Demand for money Depreciation Exchange rates Foreign exchange Inflation Money National accounts Prices Real exchange rates

English

Publication Date:

July 1, 1998

ISBN/ISSN:

9781451948585/1018-5941

Stock No:

WPIEA1011998

Pages:

34

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