Download or read book The Main Determinants of Inflation in Albania written by Ilker Domaç and published by World Bank Publications. This book was released on 1998 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: June 1998 This study of inflation in Albania yields several conclusions: * Fighting inflation and keeping exports competitive requires cuts in the budget deficit and credit to government. * The strong seasonal inflation can be somewhat ameliorated by improving infrastructure and customs services. * Structural reforms and improved infrastructure should be part of all stabilization programs, because growth reduces inflation. Domac and Elbirt investigate the behavior and determinants of inflation in Albania, using three approaches. They * Decompose inflation into four components: seasonal, cyclical, trend, and random. * Rely on the widely used Granger causality test, using disaggregated data on both the consumer price index (CPI) and key economic variables. * Apply cointegration and error-correction techniques to the process of inflation, using a simple theoretical model. Using the first approach, they conclude that inflation exhibits strong seasonal patterns associated with agriculture seasonality. Peaks and troughs of monetary aggregates correspond to those of inflation, with a two-month lag. The exchange rate also exhibits stable seasonality, reaching its trough in August and tending to depreciate early in the year. The Granger causality test shows M1 (currency in circulation plus demand deposits) and the exchange rate to have predictive content for most items of the CPI. The empirical findings also indicate that credit to government is a good predictor of medical care, transportation, and communication prices. But causality also runs from the prices of bread and cereals, recreation, education, and culture to credit to government, since these items, at least during the period under consideration, are subsidized and contribute to the budget deficit. And causality runs from credit to government to the price of nontradables, highlighting the fact that an increase in the fiscal deficit would undermine Albania's competitiveness by producing appreciation in the real exchange rate. The results of cointegration and error-correction techniques confirm that, in the long run, inflation is positively related to both money supply and the exchange rate, and negatively related to real income. A 1-percent increase in M1, for example, will raise inflation by 0.41 percent; a 1-percent depreciation of the exchange rate will increase inflation by 0.17 percent; whereas a 1-percent increase in real income will reduce inflation by 0.25 percent. Inflation adjusts to its equilibrium value fairly rapidly-25 percent a month. The impact of the exchange rate on inflation occurs a month later, while the impact of real income and money take place two and four months later, respectively. The findings support the conventional elements of a typical stabilization program. Fighting inflation and keeping exports competitive requires reducing both the budget deficit and credit to government. The strong seasonal nature of inflation can be somewhat ameliorated by improving infrastructure and customs services. Structural reforms and improvements in infrastructure should be part of any stabilization program because economic growth is an antidote to inflation. This paper-a joint product of the Albania/Croatia Country Unit, Europe and Central Asia Region, and the Poverty Reduction and Economic Management Sector Unit, East Asia and Pacific Region-is part of a larger effort in the Bank to enhance the knowledge on the inflationary process and its practical implications. The authors may be contacted at [email protected] or [email protected].
Download or read book Inflation and Money Demand in Albania written by Mr.Sanja Kalra and published by International Monetary Fund. This book was released on 1998-07-01 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper uses a simple analytical framework to estimate relationships between prices, money the exchange rate, and interest rates in Albania during 1993–97. The estimated parsimonious error correction model extends the findings of a growing literature on inflation and money demand in transition economies. The results suggest that, after the one-time effects of the 1997 crisis are taken into account, the long-run determinants of inflation and money demand remained unchanged. Strong financial policies since mid—1997 appear to have helped to restore conditions for low inflation and stable money demand.
Download or read book The Main Determinants of Inflation in Albania written by Domaç and published by . This book was released on 2013 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Reducing Inflation written by Ms.C. McNeilly and published by International Monetary Fund. This book was released on 1998-05-01 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inflation in Albania fell rapidly once comprehensive stabilization policies and market-oriented reforms were launched, in contrast to other transition economies, where price liberalization was generally followed by persistently high inflation. The early reduction of underlying inflation is confirmed by trimmed mean estimates of core inflation, which use a central portion of the commodity-wise inflation distribution. This also demonstrates the usefulness of estimating core inflation for transition economies. The early success in curbing inflation is attributed to the extremely broad scope of initial price liberalization coupled with key supporting measures. It also gives hope for early recovery from Albania’s 1997 economic crisis.
Download or read book Inflation in Albania written by Philipp Constantin Rother and published by . This book was released on 2000 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Main Determinants of Inflation in Albania written by Ilker Domac and published by . This book was released on 2016 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study of inflation i ...
Download or read book Inflation Its Dynamics and Its Possible Causes in Albania written by Robert M. Kunst and published by . This book was released on 1998 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt: Covers the period from 1994 to 1997.
Download or read book Inflation in Albania written by Mr.Philipp C. Rother and published by INTERNATIONAL MONETARY FUND. This book was released on 2000-12-01 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: As Albania has succeeded in reducing inflation to very low levels, understanding the driving forces behind the behavior of the price level becomes increasingly important for policy design. In particular, persistent changes in relative prices may contribute to movements of the aggregate price level, and policymakers need to decide to what extent such effects should be accommodated. The present study provides insight into the nature and extent of relative price adjustments during the transition period, and argues that some of their inflationary effects should not be resisted.
Download or read book The Persistence of Inflation in Albania written by Vasilika Kota and published by . This book was released on 2011 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Inflation and Money Demand in Albania written by Sanjay Kalra and published by . This book was released on 2006 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper uses a simple analytical framework to estimate relationships between prices, money, the exchange rate, and interest rates in Albania during 1993-97. The estimated parsimonious error correction model extends the findings of a growing literature on inflation and money demand in transition economies. The results suggest that, after the one-time effects of the 1997 crisis are taken into account, the long-run determinants of inflation and money demand remained unchanged. Strong financial policies since mid-1997 appear to have helped to restore conditions for low inflation and stable money demand.
Download or read book Albania Selected Issues written by International Monetary Fund and published by INTERNATIONAL MONETARY FUND. This book was released on 2010-07-12 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inflation in Southeastern European (SEE) countries has been comparable with euro area inflation, partly owing to on the one hand, high initial price levels. On the other hand, the exchange rate regime is of paramount importance, including the inflation-targeting regime pursued in Albania. The analysis also explores additional heterogeneity between SEE and other regions. Two fiscal rules-a debt rule and an expenditure rule with a debt brake-are discussed in the context of Albania's current economic outlook. Both rules will contribute toward enhancing fiscal sustainability in Albania.
Download or read book Albania written by International Monetary Fund and published by International Monetary Fund. This book was released on 1997-04-17 with total page 81 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper describes economic developments in Albania during the 1990s. Macroeconomic performance deteriorated in 1996, as the fiscal stance was weakened ahead of the parliamentary elections in May. Although two large public sector wage increases contributed, it was mainly revenue shortfalls that drove the domestically financed budget deficit to more than 101⁄2 percent of GDP—the highest level since 1992. Reflecting higher demand in the economy, the trade deficit increased from 191⁄2 percent of GDP to 25 percent of GDP, and inflation nearly tripled to 171⁄2 percent.
Download or read book Inflation in Albania written by Philipp Rother and published by . This book was released on 2006 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: As Albania has succeeded in reducing inflation to very low levels, understanding the driving forces behind the behavior of the price level becomes increasingly important for policy design. In particular, persistent changes in relative prices may contribute to movements of the aggregate price level, and policymakers need to decide to what extent such effects should be accommodated. The present study provides insight into the nature and extent of relative price adjustments during the transition period, and argues that some of their inflationary effects should not be resisted.
Download or read book Inflation and Stabilization in Albania written by and published by . This book was released on 1996 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Inflation in Albania written by and published by . This book was released on with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The International Monetary Fund (IMF) presents the full text of the December 2000 working paper entitled "Inflation in Albania," prepared by Philip C. Rother. The text is available in PDF format. This paper provides insight into the nature and extent of relative price adjustments in Albania during a recent transition period, and notes that some of their inflationary effects should not be confronted.
Download or read book Albania written by International Monetary Fund. European Dept. and published by International Monetary Fund. This book was released on 2017-12-13 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores Albania’s current account (CA) deficit that improved in 2016, but remains sizable. The EBA-Lite model results indicate that the external position is moderately weaker than implied by fundamentals and desirable policy settings. Adjusting for Albania’s specific circumstances, the current account gap is estimated at -1.0 percent and the real effective exchange rate is overvalued by about 6 percent, reflecting Albania’s low national saving and large FDI inflows. Though Albania has benefitted from the recent tourism boom in the region, the outlook for exports remains challenging. Despite its cost competitiveness, exports are narrowly concentrated in a few low-value added sectors while new investments in the nonenergy tradable sector are limited. To close Albania’s competitiveness gap and strengthen its external position, the authorities should complete key infrastructure projects to reduce transportation costs and address energy sector reliability; increase domestic savings; improve governance and the rule of law; and raise labor market efficiency by reducing skills shortages.
Download or read book Albania written by International Monetary Fund. European Dept. and published by International Monetary Fund. This book was released on 2022-12-09 with total page 89 pages. Available in PDF, EPUB and Kindle. Book excerpt: Past efforts to build policy buffers and a broadly appropriate macroeconomic policy mix during 2020–21 have helped Albania withstand the impact of consecutive shocks since 2019. Growth is expected to remain solid in 2022 before decelerating in 2023, and inflation is projected to return to the central bank’s target only in 2024. There is considerable uncertainty. Risks to growth are tilted to the downside and risks to inflation are to the upside.
