Stabilization and growth in transition economies: The early experience Report as inadecuate




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Abstract

This paper analyzes the growth and stabilization experience in26 transition economies in eastern Europe, the former Soviet Union,and Mongolia for the period 1989-1994. Inflation rates have declinedsignificantly in most countries following an inflation stabilizationprogram. Growth resumes after stabilization occurs, typically with a lagof about two years. Reducing inflation thus appears to be a preconditionfor growth. An econometric analysis of the short-run determinants ofinflation and growth illustrates the key roles of fixed exchange rates,improved fiscal balances, and structural reforms in spurring growth andlowering inflation, and confirms that inflation stabilization programshave been beneficial for growth even after controlling for structuralreforms.



Item Type: MPRA Paper -

Original Title: Stabilization and growth in transition economies: The early experience-

Language: English-

Keywords: Transition, Eastern Europe, growth, reforms, stabilization, inflation, fixed exchange rates-

Subjects: P - Economic Systems > P2 - Socialist Systems and Transitional Economies > P20 - GeneralF - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy MacroeconomicsF - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies-





Author: Fischer, Stanley

Source: https://mpra.ub.uni-muenchen.de/20631/







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