The Output-Inflation Nexus in Ukraine: Is there a Trade-Off?

Author/Editor:

Atish R. Ghosh

Publication Date:

May 1, 1996

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:

This paper examines whether expansionary credit policy can help sustain output growth in transition economies, with particular reference to Ukraine’s experience since 1992. We find that, while real credit growth is indeed associated with higher output growth, an increase in the growth rate of nominal credit does not, in general equilibrium, stimulate output growth. Following a short-lived boom — caused by falling real wages — the increase in the growth rate of nominal credit leads to a decline in the level of output.

Series:

Working Paper No. 1996/046

Subject:

Credit Demand for money Exchange rates Foreign exchange Industrial production Inflation Labor Money Prices Production Real wages

English

Publication Date:

May 1, 1996

ISBN/ISSN:

9781451973938/1018-5941

Stock No:

WPIEA0461996

Pages:

36

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