Inflation in Transition Economies: How Much? and Why?

IMF Working Papers, July 1, 1997

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Inflation in Transition Economies: How Much? and Why?

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Bibliographic details

• Authors: Atish R. Ghosh
• Published: July 1, 1997
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451955569.001

Summary

• Author: Atish R. Ghosh
• Publication date: July 1, 1997
• Series: Working Paper No. 1997/080
• Issue: 080
• Volume: 1997
• Pages: 28
• DOI: https://doi.org/10.5089/9781451955569.001
• ISSN: 1018-5941
• ISBN: 9781451955569
• Stock No: WPIEA0801997
• Core 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.
  • The essay examines whether a further reduction in inflation may be necessary and concludes that low inflation may be important for achieving remonetization of the economy and sustained output growth.

Key findings

• Inflation trajectory:
  • Transition countries experienced very high inflation at the start of reforms, later reduced to more moderate levels.
  • Current typical inflation rates in the Baltics, Russia, and other former Soviet Union countries: 10–60 percent.
• Relationship between inflation and macro outcomes:
  • Further reduction in inflation may be necessary.
  • Low inflation is concluded to be potentially important for:
  • Achieving remonetization of the economy.
  • Sustaining output growth.

Subject areas and keywords

• Subjects:
  • 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

Policy implications and analysis emphasis

• Policy implication highlighted:
  • Reducing inflation further may be required to support remonetization and sustained output growth in transition economies.
• Analytical emphasis:
  • The essay explores the necessity and benefits of lower inflation within the context of post-reform transition economies, focusing on monetary variables and production/growth outcomes.

IMF Working Paper: Atish R. Ghosh, "Inflation in Transition Economies: How Much? and Why?", July 1, 1997, Working Paper No. 1997/080.

Content in this bundle

• Inflation in Transition Economies: How Much? and Why? -WP/97/80
  • Inflation in Transition Economies: How Much? and Why? -WP/97/80 (Markdown version)
  • Inflation in Transition Economies: How Much? and Why? -WP/97/80 (PDF)