Inflation's Children: Tales of Crises that Beget Reforms

12 Pages Posted: 15 Sep 2000

See all articles by William Easterly

William Easterly

New York University - Department of Economics

Michael Bruno

Hebrew University (Deceased)

Date Written: February 1996

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.

Suggested Citation

Easterly, William and Bruno, Michael, Inflation's Children: Tales of Crises that Beget Reforms (February 1996). NBER Working Paper No. w5452. Available at SSRN: https://ssrn.com/abstract=225508

William Easterly (Contact Author)

New York University - Department of Economics ( email )

269 Mercer Street
New York, NY 10003
United States

Michael Bruno

Hebrew University (Deceased)

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