{
  "title": "Pensions, Price Shocks, and Macroeconomic Stability in Transition Economies: Illustrations From Belarus",
  "publication": "IMF Working Papers, May 1, 1994",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/pensions-price-shocks-and-macroeconomic-stability-in-transition-economies-illustrations-from-1900",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/30/pensions-price-shocks-and-macroeconomic-stability-in-transition-economies-illustrations-from-1900",
  "overlayPath": "/en/publications/wp/issues/2016/12/30/pensions-price-shocks-and-macroeconomic-stability-in-transition-economies-illustrations-from-1900/index.md",
  "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.",
  "sections": [
    {
      "heading": "Overview and Purpose",
      "content": "- Authors: Sergio Lugaresi, Ehtisham Ahmad, Jean-Luc Schneider, Alex Mourmouras\n- Publication date: May 1, 1994\n- Series: Working Paper No. 1994/052\n- Issue: 052\n- Volume: 1994\n- Pages: 30\n- DOI: https://doi.org/10.5089/9781451847185.001\n- ISBN: 9781451847185\n- ISSN: 1018-5941\n- Objective: To analyze effects of pension revaluation and indexation arrangements—particularly lagged indexation—on macroeconomic stability in transition economies, with illustrative examples from Belarus."
    },
    {
      "heading": "Key Findings",
      "content": "- Pensioners are a large and vulnerable population group in many countries of the former Soviet Union, with pensions fixed in nominal terms.\n- Policy attempts to protect pensioners have included:\n  - Revaluation of benefits for retirees.\n  - Introduction of indexation arrangements based on recent wage and price growth.\n- Lagged indexation arrangements are shown to have large destabilizing effects that can potentially jeopardize the macroeconomic adjustment effort, particularly as inflation begins to decelerate.\n- The paper discusses some long-term problems relating to the aging of the population and associated policies."
    },
    {
      "heading": "Mechanisms and Dynamics Highlighted",
      "content": "- Indexation based on recent wage and price growth with lags can amplify instability rather than stabilize real incomes when inflation is changing.\n- As inflation decelerates, lagged adjustments can lead to excessive real wage/pension growth that undermines macroeconomic adjustment."
    },
    {
      "heading": "Illustrative Evidence",
      "content": "- Illustrative examples from Belarus are presented to demonstrate the destabilizing potential of lagged pension indexation arrangements in a transition economy context."
    },
    {
      "heading": "Policy Implications and Recommendations",
      "content": "- Revaluation and indexation mechanisms need careful design to avoid destabilizing macroeconomic effects.\n- Consideration of timing and reference bases for indexation is crucial, especially during periods of disinflation.\n- Long-term demographic trends (aging populations) require policies that account for sustainability of pension spending and macroeconomic stability."
    },
    {
      "heading": "Subjects and Keywords",
      "content": "- Subjects: Aging, Expenditure, Inflation, Labor, Pension spending, Pensions, Population and demographics, Prices, Wages\n- Keywords: Aging, Eastern Europe, flat rate, Inflation, Pension spending, Pensions, reference wage, wage, wage bill, wage growth, wage inflation, wage revaluation, Wages, WP\n\nSource: IMF Working Papers, \"Pensions, Price Shocks, and Macroeconomic Stability in Transition Economies: Illustrations From Belarus\", May 1, 1994.\n\n---\n\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/pensions-price-shocks-and-macroeconomic-stability-in-transition-economies-illustrations-from-1900"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/30/pensions-price-shocks-and-macroeconomic-stability-in-transition-economies-illustrations-from-1900/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/30/pensions-price-shocks-and-macroeconomic-stability-in-transition-economies-illustrations-from-1900/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/30/pensions-price-shocks-and-macroeconomic-stability-in-transition-economies-illustrations-from-1900/bundle-manifest.json)",
    "Authors: Sergio Lugaresi, Ehtisham Ahmad, Jean-Luc Schneider, Alex Mourmouras",
    "Published: May 1, 1994",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451847185.001",
    "Authors: Sergio Lugaresi, Ehtisham Ahmad, Jean-Luc Schneider, Alex Mourmouras",
    "Publication date: May 1, 1994",
    "Series: Working Paper No. 1994/052",
    "Issue: 052",
    "Volume: 1994",
    "Pages: 30",
    "DOI: https://doi.org/10.5089/9781451847185.001",
    "ISBN: 9781451847185",
    "ISSN: 1018-5941",
    "Objective: To analyze effects of pension revaluation and indexation arrangements—particularly lagged indexation—on macroeconomic stability in transition economies, with illustrative examples from Belarus.",
    "Pensioners are a large and vulnerable population group in many countries of the former Soviet Union, with pensions fixed in nominal terms.",
    "Policy attempts to protect pensioners have included:",
    "Lagged indexation arrangements are shown to have large destabilizing effects that can potentially jeopardize the macroeconomic adjustment effort, particularly as inflation begins to decelerate.",
    "The paper discusses some long-term problems relating to the aging of the population and associated policies.",
    "Indexation based on recent wage and price growth with lags can amplify instability rather than stabilize real incomes when inflation is changing.",
    "As inflation decelerates, lagged adjustments can lead to excessive real wage/pension growth that undermines macroeconomic adjustment.",
    "Illustrative examples from Belarus are presented to demonstrate the destabilizing potential of lagged pension indexation arrangements in a transition economy context.",
    "Revaluation and indexation mechanisms need careful design to avoid destabilizing macroeconomic effects.",
    "Consideration of timing and reference bases for indexation is crucial, especially during periods of disinflation.",
    "Long-term demographic trends (aging populations) require policies that account for sustainability of pension spending and macroeconomic stability.",
    "Subjects: 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"
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/30/pensions-price-shocks-and-macroeconomic-stability-in-transition-economies-illustrations-from-1900/index.md",
    "json": "/en/publications/wp/issues/2016/12/30/pensions-price-shocks-and-macroeconomic-stability-in-transition-economies-illustrations-from-1900/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/30/pensions-price-shocks-and-macroeconomic-stability-in-transition-economies-illustrations-from-1900/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T07:12:35.888Z"
}