Fiscal Deficits, Monetary Reform, and Inflation Stabilization in Romania
Fiscal Deficits, Monetary Reform, and Inflation Stabilization in Romania

Author: Nina Budina

Publisher: World Bank Publications

Published: 2000

Total Pages: 38

ISBN-13:

DOWNLOAD EBOOK

Fiscal problems are a key factor behind the inflation that has persisted in Eastern Europe since 1989. Deficits need to be cut back, but by how much for a given inflation target? A simple framework links debt, the deficit, and inflation to assess the fiscal stance of the Romanian economy.

Exchange Market Reform, Inflation, and Fiscal Deficits
Exchange Market Reform, Inflation, and Fiscal Deficits

Author: E. Murat Ucer

Publisher: International Monetary Fund

Published: 1995-08-01

Total Pages: 56

ISBN-13: 1451850069

DOWNLOAD EBOOK

This paper examines the short- and long-run effects of exchange market reform in developing countries. The first part reviews the recent experience of Guyana, India, Jamaica, Kenya, Sierra Leone, and Sri Lanka with exchange market reform. The second part studies analytically the short-run dynamics of the parallel market premium and the money supply upon unification, when the post-reform regime consists of either a pure float or a managed float. The third part discusses the impact of unification on inflation and quasi-fiscal deficits, and identifies a variety of implicit taxes and subsidies that must be taken into account in assessing the longer-run effects of exchange market reform.

Fiscal Deficits and Inflation Management
Fiscal Deficits and Inflation Management

Author: Shruthi Jayaram

Publisher:

Published: 2008

Total Pages:

ISBN-13:

DOWNLOAD EBOOK

This paper begins with a brief overview of the prevailing fiscal scenario in India, emphasizing the path of the fiscal deficit between 1991 and the present fiscal year. It then examines the prevailing monetary policy framework and the key issues involved which lead up to a debate on monetary reform in India. It examines the link between fiscal deficits and price stability/inflation management. This is done in two parts - the first examining the impact of fiscal policy on inflation, and the second examining the impact of monetary policy on government debt and deficit. These impacts are examined by explaining the existing theory of the links between these issues, and then contextualizing each of the links for the Indian case. Having established that complementary fiscal rules are needed before moving towards establishing a monetary policy rule in India, the paper examines the existing fiscal rules and their suitability/efficacy towards supporting possible monetary reform, and concludes by looking at fiscal and political limitations towards monetary reforms in India.

Multiple Exchange Rates, Fiscal Deficits and Inflation Dynamics
Multiple Exchange Rates, Fiscal Deficits and Inflation Dynamics

Author: Mr.Vincent Bodart

Publisher: International Monetary Fund

Published: 1996-05-01

Total Pages: 40

ISBN-13: 145196837X

DOWNLOAD EBOOK

The paper explores the inflationary implications of exchange rate regime reforms in a small open economy model combining the public finance view of inflation with multiple exchange markets. To account for the experience of many developing countries, the analysis focuses on transitions to multiple official exchange markets. In those countries, multiple exchange rates were often announced as temporary. The paper shows that the dynamic response of inflation to the reform markedly differ whether the announcement is credible or not. The paper also compares the response of inflation under a fixed crawl of nominal official rates and under the presence of policy rules aimed at reducing the spread between the official and parallel exchange rates.

Fiscal Deficits and Inflation
Fiscal Deficits and Inflation

Author: Mr.Luis Catão

Publisher: International Monetary Fund

Published: 2003-04-01

Total Pages: 34

ISBN-13: 1451848706

DOWNLOAD EBOOK

Macroeconomic theory postulates that fiscal deficits cause inflation. Yet empirical research has had limited success in uncovering this relationship. This paper reexamines the issue in light of broader data and a new modeling approach that incorporates two key features of the theory. Unlike previous studies, we model inflation as nonlinearly related to fiscal deficits through the inflation tax base and estimate this relationship as intrinsically dynamic, using panel techniques that explicitly distinguish between short- and long-run effects of fiscal deficits. Results spanning 107 countries over 1960-2001 show a strong positive association between deficits and inflation among high-inflation and developing country groups, but not among low-inflation advanced economies.

Inflation, External Debt, and Financial Sector Reform
Inflation, External Debt, and Financial Sector Reform

Author: Sweder van Wijnbergen

Publisher:

Published: 1989

Total Pages: 40

ISBN-13:

DOWNLOAD EBOOK

This new model can be used to derive the financeable fiscal deficit, given inflation targets, or to derive an equilibrium inflation rate for which no fiscal adjustment would be necessary. Here it is used to analyze inflation, external debt, and financial sector reform in Turkey.

Inflation and Monetary Reform
Inflation and Monetary Reform

Author: Pierre-Richard Agénor

Publisher: International Monetary Fund

Published: 1992-08-01

Total Pages: 34

ISBN-13: 1451965311

DOWNLOAD EBOOK

The introduction of a new currency has often occurred as part of a program to fight hyperinflation. In this context, non-uniform conversion rates for different types of assets and liabilities have been used as a means of reducing an initial “excess” stock of liquidity. The paper examines the anticipatory dynamics associated with such reforms. The analysis suggests that monetary reforms of this type have a deflationary effect upon announcement as well as during the transition period. Under uncertainty about the reform date, the direction of the initial jump in prices upon announcement is a priori ambiguous. Upon implementation, a monetary reform leads to a downward jump in prices.