The Roles of Monetary Policy in the Process of Economic Reform in Eastern Europe

Peter Bofinger ()

No 457, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: The first part of the paper analyzes the inflationary risks associated with price liberalization, the welfare costs of inflation and the difficulties of East European central banks in pursuing non-inflationary policies. The main obstacles are the low credibility of stabilization policies and a strategy problem, which is related to the high instability of real and financial sectors. The second part analyzes three options of an ecu-peg for East European currencies: a unilateral peg to the ECU, membership in the Exchange Rate Mechanism of the European Monetary System, and participation in a future European Monetary Union (EMU).

Keywords: Central Bank; Europe; Inflation; Monetary Policy (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 (search for similar items in EconPapers)
Date: 1990-09
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Citations: View citations in EconPapers (2)

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