Inflation in Transition Economies: How Much? and Why?

ByAtish R. Ghosh

July 1, 1997

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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

Following very high inflation rates at the beginning of the reform process, most transition countries have succeeded in lowering their inflation to more moderate rates. Inflation rates in the Baltics, Russia, and other countries of the former Soviet Union are now typically in the range of 10–60 percent. This essay examines whether a further reduction in inflation may be necessary. It concludes that low inflation may be important for achieving remonetization of the economy and sustained output growth.

Subject: Demand for money, Expenditure, Inflation, Monetary base, Money, Prices, Production, Production growth, Public expenditure review

Keywords: Baltics, Demand for money, Eastern Europe, GDP, Growth, Inflation, inflation elasticity, inflation rate, inflation stabilization, Monetary base, monetization, monetization Pr, Production growth, Public expenditure review, rate of inflation, Transition Economies, transition economy, WP

Pages:
28
Volume:
1997
DOI:
https://doi.org/10.5089/9781451955569.001
Issue:
080
Series:
Working Paper No. 1997/080
Stock No:
WPIEA0801997
ISBN:
9781451955569
ISSN:
1018-5941

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