- Peter Doyle, and Carlo Cottarelli
- Published Date:
- August 1999
© 1999 International Monetary Fund
Production: IMF Graphics Section
Figures: Sanaa Elaroussi and In-Ok Yoon
Typesetting: Victor Barcelona
Disinflation in transition, 1993–97 / Carlo Cottarelli and Peter Doyle.,—
Washington, DC: International Monetary Fund, 1999.
p. cm. — (Occasional paper, ISSN 0251–6365; no. 179)
“Issues in Transition”—Cover.
Includes bibliographical references.
1. Monetary policy—Europe, Eastern. 2. Monetary policy—Europe, Central. 3. Monetary policy—Former Soviet Republics. 4. Inflation (Finance)—Europe, Eastern. 5. Inflation (Finance)—Europe, Central. 6. Inflation (Finance)—Former Soviet Republics. 7. Economic stabilization—Europe, Eastern. 8. Economic stabilization—Europe, Central. 9. Economic stabilization—Former Soviet Republics. 10. Industrial productivity—Europe, Eastern. 11. Industrial productivity—Europe, Central. 10. Industrial productivity—Former Soviet Republics. I. Doyle, Peter. II. International Monetary Fund. III. Occasional paper (International Monetary Fund); no. 179. HG930.7.C67 1999
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- I Introduction
- II Inflation Developments
- III Disinflation, Output, and the Current Account Balance
- IV Inflation Inertia, Credibility, and Disinflation
- V Persistent Moderate Inflation
- VI Conclusions
- I. Relation Between Inflation and Output in Transition Revisited
- II. Financial Stability
- IV 1. Relative Prices and Inflation: A Look Ahead
- 2. Inflation and Fiscal Deficits: Summary of Econometric Results
- 3. Disinflation Reversals in 1993–97: Albania, Bulgaria, and Romania
- II 1. Twelve-Month Inflation Rates in Transition Economies
- 2. Disinflation Thresholds
- IV 3. Administered Price Changes
- 4. Development of Government Securities Markets
- 5. Overall and Primary General Government Balances, and Central Bank Financing to the Government
- 6. Fiscal and Inflation Developments
- 7. General Government Revenue and Primary Expenditures in Transition Economies
- 8. Actual and Sustainable Primary Fiscal Balances
- 9. Broad Money Growth and Depreciation Rates in Transition Economies
- 10. Number of Peggers and Floaters
- 11. Exchange Rate Regime in Transition Countries
- 12. Developments in Central Bank Legislation
- 13. Regression Results
- III 1. The Baltics, Russia, and Other Countries of the Former Soviet Union and Central and Eastern Europe—GDP Growth, Inflation, and Transition Index
- 2. The Baltics, Russia, and Other Countries of the Former Soviet Union and Central and Eastern Europe—Current Account Balance, in Percent of GDP, 1990–97
- IV 3. Transition Economies: Fiscal Performance Versus Inflation Performance, 1994–97
- V 4. Advanced Transition Reformers, 1990–97
The following symbols have been used throughout this paper:
- … to indicate that data are not available;
- n.a. to indicate not applicable;
- — to indicate that the figure is zero or less than half the final digit shown, or that the item does not exist;
- – between years or months (e.g., 1994–95 or January–June) to indicate the years or months covered, including the beginning and ending years or months;
- / between years (e.g., 1994/95) to indicate a crop or fiscal (financial) year.
“Billion” means a thousand million.
Minor discrepancies between constituent figures and totals are due to rounding.
The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice; the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.
This Occasional Paper, another in the series on special issues in transition, reviews the experience of disinflation during 1993–97 in Central and Eastern Europe and in the Baltics, Russia, and other countries of the former Soviet Union. Inflation dropped dramatically during this period, with the Baltics, Russia, and other countries of the former Soviet Union catching up with earlier progress made in the early 1990s in many Central and Eastern European countries. This paper reviews the economic policies that were behind the decline in inflation as well as other factors that facilitated the process.
The authors of this paper, Carlo Cottarelli and Peter Doyle, are both members of the European I Department. Their work greatly benefited from the cooperation provided by desk economists working on transition countries in both the European I and European II Departments. They also would like to thank for their helpful comments Gerard Belanger, Michael Deppler, John Odling-Smee, Oleh Havrylyshyn, and Tom Wolf. Helpful suggestions were also received from Executive Directors to whom a previous draft was presented at a Board seminar. The authors are also indebted to Patricia Emerson and Indra Perera for assisting in numerous drafts, to David Maxwell for research, and to Martha Bonilla of the External Relations Department for editing the paper and coordinating its production and publication.
The opinions expressed are solely those of the authors and do not necessarily reflect the views of the IMF, Executive Directors, or the authorities of the countries covered in this study.