Inflation's Children: Tales of Crises that Beget Reforms

Michael Bruno and William Easterly

No 5452, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Are broad reforms the children of high inflation? Do growth recoveries follow? We find that countries that had external debt crises with high inflation both reformed more and recovered better than countries that had external debt crises with low inflation. Countries with extremely high inflation also later wound up with lower inflation than countries that has moderately high inflation. The low inflation debtor countries had more aid than the high inflation debtor countries, which may have created stronger incentives to reform in the high inflation countries. Recent reforms look like they are the children of high inflation, even if further paternity tests are in order.

Date: 1996-02
Note: IFM ME
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Citations: View citations in EconPapers (44)

Published as American Economic Review, Vol. 86, no. 2 (May 1996): 213-217.

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Journal Article: Inflation's Children: Tales of Crises That Beget Reforms (1996)
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