Establishing Monetary Stability In Emerging Market Economies (Political Economy of Global Interdependence)

There has been fierce debate about the optimal sequencing of economic reforms in emerging market economies. Many economists argue that for market-oriented systems to operate effectively, a reasonable degree of monetary stability is necessary. Rampant inflation, a common challenge for emerging economies, greatly reduces the chances that market-oriented reforms will be successful. In this comprehensive volume, a group of policy-oriented economists from North America, Europe, and the former Soviet Union explore the causes of monetary instability in reforming economies and evaluate alternative institutional mechanisms designed to reduce inflationary pressures. Considering the latest theoretical and empirical research–as well as the experiences of former Communist countries, including Russia and the erstwhile Soviet republics–the contributors view inflation as a political issue and make a case for the creation of strong political institutions. They argue that although government actions that stimulate inflation tend to have low costs or even benefits in the sort run, they impose heavy costs on the economy in the longer term. Consequently, there is a strong need to develop institutional mechanisms to help ensure that decision makers place appropriate emphasis on the long-run consequences of policy actions. Introduction: The Political Economy Of Establishing Monetary Stability / Thomas D. Willett [and Others] -- The High Costs Of Monetary Instability / Richard C.k. Burdekin, Suyono Salamun And Thomas D. Willett -- Budget Deficits And Inflation: The Importance Of Budget Controls For Monetary Stability / Richard C.k. Burdekin -- Inflation And Optimal Seigniorage In The Cis And Eastern Europe / King Banaian -- The Politics Of Inflation: An Empirical Assessment Of The Emerging Market Economies / Marina Arbetman And Jacek Kugler -- Guidelines For Constructing Monetary Constitutions / Thomas D. Willett -- Designing Central Bank Arrangements To Promote Monetary Stability / Richard C.k. Burdekin And Thomas D. Willett -- Central Banking In Economies In Transition / Eduard Hochreiter -- Alternative Approaches To Monetary Reform In The Formerly Communist Countries: A Parallel Strategy / Annelise Anderson -- The Russian Central Bank And The Conduct Of Monetary Policy / Stephen Lewarne -- Impediments To The Macroeconomic Stabilization Of Russia / Manuel Hinds -- The Collapse Of The Ruble Zone, 1991-93 / King Banaian And Eugenue Zhukov -- The Latvian Monetary Reform / George J. Viksnins And Ilmars Rimshevitchs -- Fiscal And Monetary Policies In The Transition: Searching For The Credit Crunch / Pierre Siklos And István Ábel. Edited By Thomas D. Willett ... [et Al]. Includes Bibliographical References And Index. There has been fierce debate about the optimal sequencing of economic reforms in emerging market economics. Many economists argue that for market-oriented systems to operate effectively, a reasonable degree of monetary stability is necessary. Rampant inflation, a common challenge for emerging economies, greatly reduces the chances that market-oriented reforms will be successful. In this comprehensive volume, a group of policy-oriented economists from North America, Europe, and the former Soviet Union explore the causes of monetary instability in reforming economies and evaluate alternative institutional mechanisms designed to reduce inflationary pressures. Considering the latest theoretical and empirical researchas well as the experiences of former Communist countries, including Russia and the erstwhile Soviet republics - the contributors view inflation as a political issue and make a case for the creation of strong political institutions. They argue that although government actions that stimulate inflation tend to have low costs or even benefits in the short run, they impose heavy costs on the economy in the longer term. Consequently, there is a strong need to develop institutional mechanisms to help ensure that decisionmakers place appropriate emphasis on the long-run consequences of policy actions. An exploration of inflation as a political issue. The contributors argue that, although government actions that stimulate inflation tend to have low costs or even short benefits in the short run, they impose heavy costs on the economy in the longer term.