Forced Savings and Repressed Inflation in the Soviet Union: Some Empirical Results

Mario Bléjer and Carlo Cottarelli

No 1991/055, IMF Working Papers from International Monetary Fund

Abstract: In countries such as the Soviet Union, where wealth is mainly stored in monetary assets, the behavior of the money to income ratio is a poor indicator of the growth of undesired monetary balances (monetary overhang). In those countries a monetary overhang is primarily a wealth overhang, which has to be analyzed by evaluating deviations of actual from desired wealth holdings; this requires an empirical analysis of consumption and saving decisions. In this paper, we present estimates of a consumption function for the Soviet Union, from which an evaluation of the monetary overhang existing at the end of 1990 is derived.

Keywords: WP; excess demand; consumption behavior; price level; consumer goods; equation C; price liberalization; wealth overhang; round price effect; saving propensity; consumption expenditure; liberalization policy; Consumption; Disposable income; Income; Inflation; Household consumption (search for similar items in EconPapers)
Pages: 62
Date: 1991-06-01
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Citations: View citations in EconPapers (6)

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