Monetary policy in economic transition: Lessons from the French post-war experience

Gilles Saint-Paul

Research output: Contribution to journalArticlepeer-review

Abstract

Although tax and expenditure smoothing requires high deficits in 'transition' periods, this policy is difficult to implement because it leads to excess inflationary expectations and speculative attacks. This forces the government to adopt a suboptimally restrictive fiscal policy. It is argued that a potential explanation for this is that there is more incentive for 'weak' governments to act as 'strong' ones, as compared to non-transitional periods. The model explains well the immediate post-war inflation experience in France.

Original languageEnglish (US)
Pages (from-to)891-898
Number of pages8
JournalEuropean Economic Review
Volume38
Issue number3-4
DOIs
StatePublished - Apr 1994

Keywords

  • Economic transition
  • Monetary policy

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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