IMF Working Papers

Explaining and Forecasting the Velocity of Money in Transition Economies, with Special Reference to the Baltics, Russia and other Countries of the Former Soviet Union

September 1, 1997

Download PDF

Preview Citation

Format: Chicago

Explaining and Forecasting the Velocity of Money in Transition Economies, with Special Reference to the Baltics, Russia and other Countries of the Former Soviet Union, (USA: International Monetary Fund, 1997) accessed November 21, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

The paper identifies a number of stylized facts on the behavior of key macroeconomic variables during high inflation and stabilization in countries in transition. To examine the extent to which these stylized facts conform to the predictions of standard open economy monetary theory, the paper develops a simple monetary model of the exchange rate incorporating price stickiness and inflation inertia, and carries out an econometric analysis of the behavior of real money balances during inflation stabilization. The paper concludes by assessing the prospects for velocity developments in countries in transition, including the likely pace of remonetization.

Subject: Demand for money, Exchange rates, Foreign exchange, Inflation, Monetary base, Money, Prices, Spot exchange rates

Keywords: Baltics, Central and Eastern Europe, Dd log exchange rate, Demand for money, Eastern Europe, Exchange rates, Income velocity of money, Inflation, Monetary base, Money balance, Money stock, Open economy, Price level, Rate of depreciation, Rate of exchange rate depreciation, Rate of inflation, Spot exchange rates, Spot market, Stabilization, Stabilization program, Transition economies, WP

Publication Details

  • Pages:

    46

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 1997/108

  • Stock No:

    WPIEA1081997

  • ISBN:

    9781451853063

  • ISSN:

    1018-5941

You May Also Be Interested In...

Kiribati: Agricultural Subsidies for Copra: Improving Efficiency and Equity and Balancing Trade-offs

November 21, 2024

EBA-Lite 3.0 Model and Methodology

November 18, 2024

Quarterly Projection Model for the Bank of Ghana: Extensions and Applications

November 15, 2024

Foreign Exchange Intervention Under the Integrated Policy Framework: The Case of India

November 15, 2024