Cover IMF Working Papers
Pensions, Price Shocks, and Macroeconomic Stability in Transition Economies: Illustrations From Belarus
Author: Sergio Lugaresi, Mr. Ehtisham Ahmad, Mr. Jean-Luc Schneider, and Mr. Alex Mourmouras
Series:
IMF Working Papers
Volume/Issue:
Volume 1994: Issue 052
Language:
English
Publication Date:
01 May 1994
DOI:
https://doi.org/10.5089/9781451847185.001
ISBN:
9781451847185
ISSN:
1018-5941
Pages:
30
Keywords:
WP; flat rate; wage bill; wage; wage inflation; wage revaluation; reference wage; wage growth; Pension spending; Pensions; Wages; Aging; Inflation; Eastern Europe
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund