Monetary Policy In Transition: Inflation Nexus Money Supply In Postcommunist Russia Inflation Nexus Money Supply In Postcommunist Russia

This book explores the disastrous economic consequences of pseudo lending for pseudo reforms that occurred when the IMF, as a representative of the West, pretended to aid the transition economy of post-communist Russia through stabilization while the Russian government promised reforms. This book offers the most comprehensive empirical analysis of monetary developments in the Russian Federation during the first post-communist decade. The book scrutinizes critically and rigorously, the stabilization process in post-communist Russia, the strengths, dynamics, and causality of the relationship between inflation and various monetary aggregates as well as the role of the IMF in that process. The common theme generated from the analysis is that the monetary policies implemented in Russia during the period under consideration were less than optimal. Inadequate or even inappropriate prescription and halfhearted implementation of various monetary stabilizations, conducted under the auspices of the IMF had disastrous effects on this transition economy and the welfare of society as a whole. Inevitably, the role of the IMF in Russia is critically exposed Cover 1 Title 4 Copyright 5 Contents 6 List of Tables 8 List of Figures 10 Acknowledgements 11 Introduction 12 1 The Emergence of Open Inflation and Stabilization Efforts in Postcommunist Russia 15 Introduction 15 The monetary roots of inflation in postcommunist Russia 16 The fiscal theory of price level and its application to Russia 25 Frameworks for analyzing the impact of monetary and fiscal policies on macroeconomic stabilization 27 Interaction of fiscal and monetary policies during transition 31 2 Inflation Expectations in Postcommunist Russia 37 Introduction 37 A brief overview of the literature on inflation expectations in postcommunist Russia and early reactions to open inflation 38 Methodology and model specification 43 Results 46 Alternative modelling 53 Forecasting inflation 56 Rationality of expectations of inflation 59 Policy implications and further research 63 Conclusion 64 3 The Relationship between Money Supply and Inflation in Postcommunist Russia 66 Introduction 66 A brief overview of Russian monetary policy and the related literature 67 Data and methodological overview 69 Results 73 Dividing the sample 82 Conclusion 88 4 Money-Inflation Causality in Transition Economies: The Case of Russia 90 Introduction 90 Data and methodological overview 92 The Wiener-Granger causality model and the lag-length selection criteria 95 Empirical results 97 Policy considerations 106 Conclusion 110 5 The Role of International Financial Institutions in Stabilizing the Russian Economy 111 Introduction 111 The role of the IMF in the global financial architecture 112 The Washington Consensus 113 The IMF's involvement in Russia: general policy considerations 114 Quantitative indicators of capital flows and the IMF's involvement in the European transition economies and the Russian Federation 116 Common criticisms of the IMF programmes 128 Specific policy considerations of the IMF's involvement in postcommunist Russia 129 Alternative medicine: more prescriptions, fewer injections 133 Conclusion 134 Conclusions and Directions for Further Research 136 Appendix 140 Notes 143 Bibliography 153 Index 162 Lack Of Coordination Of Fiscal And Monetary Policies, Disregard For The High Degree Of Inflation Persistency, Unstable Relations And Bilateral Causality Between Money Supply And Inflation, All Imply An Inappropriateness Of Money-based Stabilizations For The Transition Economy Of Postcommunist Russia Conducted Under The Auspices Of The Imf. As A Representative Of The West, The Imf Pretended To Aid Russians Through Stabilisation. The Imf Promised Loans While The Russian Government Promised Reforms. This Turned Out To Be A Pseudo Lending For Pseudo Reforms With Disastrous Consequences For The Russian Economy As Explored And Scrutinized In This Volume.--book Jacket. 1. The Emergence Of Open Inflation And Stabilization Efforts In Postcommunist Russia -- 2. Inflation Expectations In Postcommunist Russia -- 3. The Relationship Between Money Supply And Inflation In Postcommunist Russia -- 4. Money-inflation Causality In Transition Economies : The Case Of Russia -- 5. The Role Of International Financial Institutions In Stabilizing The Russian Economy. Milan Nikolić. Includes Bibliographical References (p. 139-147) And Index. Pt. I. Introduction -- Pt. Ii. Property Rights In Philosophy And Economics. 1. Theories Of Property In Classical Philosophy. 2. The Neoclassical Definition Of Property. 3. The Monetary Theory Of Private Property. 4. The Genesis And Changes Of Property As Portrayed By Old Institutionalists. 5. Property As An Institution: Summary And Prospect -- Pt. Iii. Property Rights In Planned Economies. 6. Legal Types Of Property And Ownership Guarantee. 7. Ownership Of The Means Of Production. 8. Employment Guarantee And Social Security. 9. Property Erosion And The Initial Situation Before Transformation -- Pt. Iv. Property Rights In Transition. 10. The Course Of Transformation. 11. The Question Of Property. 12. The Legal Solution. Hella Engerer. Includes Bibliographical References (p. 293-312) And Index. This text analyzes the emergence, evolution and theory of property rights and establishes the limits for privatization of state owned enterprises in the transitional economies of eastern Europe. It counters the assumption that reduction of the state sector helps to create the basis for a private property system, showing that privatization actually presupposes a stable framework including property order. The book makes use of an outstanding methodological approach, reaching well beyond the limits of pure economic observation. This book contributes to the understanding of the emerging economic order of central and eastern Europe "Using Germany as a focal point, this book asks whether foreign banks can solve the problems involved in creating a well-functioning market economy. Drawing on extensive interviews, as well as a range of English and German sources, it argues that there are no quickfix solutions to transition to a market economy. The German case is also accompanied by a broader review of the situation in Central and Eastern Europe. The findings contain lessons for academics, policy-makers and bankers in all countries undergoing financial development and deepening."--Jacket Front Matter....Pages i-xiii The Emergence of Open Inflation and Stabilization Efforts in Postcommunist Russia....Pages 1-22 Inflation Expectations in Postcommunist Russia....Pages 23-51 The Relationship between Money Supply and Inflation in Postcommunist Russia....Pages 52-75 Money-Inflation Causality in Transition Economies: The Case of Russia....Pages 76-96 The Role of International Financial Institutions in Stabilizing the Russian Economy....Pages 97-121 Conclusions and Directions for Further Research....Pages 122-125 Back Matter....Pages 126-158 At first, this project was intended to be a study on transition and privatization in Romania, a country viewed with suspicion even today, due to its past, and considered a "taboo-zone", that seems to forbid even the slightest interest.