Stabilization and Growth in Transition Economies : The Early Experience /

This paper analyzes the growth and stabilization experience in 26 transition economies in eastern Europe, the former Soviet Union, and Mongolia for the period 1989-1994. Inflation rates have declined significantly in most countries following an inflation stabilization program. Growth resumes after s...

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Bibliographic Details
Main Author: Fischer, Stanley
Other Authors: Sahay, Ratna, Vegh Gramont, Carlos
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 1996.
Series:IMF Working Papers; Working Paper ; No. 1996/031
Online Access:Full text available on IMF
Description
Summary:This paper analyzes the growth and stabilization experience in 26 transition economies in eastern Europe, the former Soviet Union, and Mongolia for the period 1989-1994. Inflation rates have declined significantly in most countries following an inflation stabilization program. Growth resumes after stabilization occurs, typically with a lag of about two years. Reducing inflation thus appears to be a precondition for growth. An econometric analysis of the short-run determinants of inflation and growth illustrates the key roles of fixed exchange rates, improved fiscal balances, and structural reforms in spurring growth and lowering inflation, and confirms that inflation stabilization programs have been beneficial for growth even after controlling for structural reforms.
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Physical Description:1 online resource (32 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students