Pensions, Price Shocks, and Macroeconomic Stability in Transition Economies: Illustrations From Belarus
May 1, 1994
More Formats on IMF eLibrary
Order a Print CopyDisclaimer: 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
In many countries of the former Soviet Union, pensioners form a large and vulnerable group of the population, with pensions fixed in nominal terms. Attempts to “protect” this group have included a revaluation of benefits for retirees and the introduction of indexation arrangements based on recent wage and price growth. In this paper, lagged indexation arrangements are shown to have large destabilizing effects that can potentially jeopardize the macroeconomic adjustment effort, particularly as inflation begins to decelerate. Some long-term problems relating to the aging of the population and associated policies are also discussed. Illustrative examples from Belarus are presented.
Subject: Aging, Expenditure, Inflation, Labor, Pension spending, Pensions, Population and demographics, Prices, Wages
Keywords: Aging, Eastern Europe, flat rate, Inflation, Pension spending, Pensions, reference wage, wage, wage bill, wage growth, wage inflation, wage revaluation, Wages, WP
Pages:
30
Volume:
1994
DOI:
Issue:
052
Series:
Working Paper No. 1994/052
Stock No:
WPIEA0521994
ISBN:
9781451847185
ISSN:
1018-5941
