Monetary stabilization in countries in transition |
| |
Authors: | Axel Jochem |
| |
Affiliation: | (1) Dresden University of Technology, Germany |
| |
Abstract: | The best way to prevent hyperinflation when domestic prices are liberalized is to initiate the transition from a planned economy to a market economy with a currency reform. In the following period, moderate inflation and flexible exchange rates are suitable to facilitate relative price adjustments. Only after the bulk of alignments has been accomplished can a switch in the exchange rate regime be convenient. The nominal peg of a stable reference currency lowers the level and the variance of domestic inflation rates. The credibility of an exchange rate target may best be achieved by combining a currency board (objective sustainability) with a crawling peg (political sustainability). Price stability can be realized in the long run by reducing the annual depreciation rate in regular, preannounced steps. |
| |
Keywords: | |
本文献已被 SpringerLink 等数据库收录! |
|