An Analysis of Repressed Inflation in Two Transition Economies
Economics of Planning, Vol. 29, pp. 51-65, 1996
Posted: 29 Oct 2005
We construct a simple model that tests for repressed inflation by estimating a "true" rate of inflation that explains behavior of observed money demand. We estimate the model using quarterly data for Czechoslovakia and Poland. Although our results should be viewed as preliminary, given the imperfect nature of our data, we do have strong evidence that, prior to 1991, there was considerable repressed inflation in Poland, while there was essentially no repressed inflation in Czechoslovakia.
Keywords: Transition, repressed inflation
JEL Classification: E31, P20
Suggested Citation: Suggested Citation