The title of this paper is not yet anachronistic, for the Soviet heritage of domestic and interrepublican economic arrangements sets the initial constraints for economic reform in the republics of the former Soviet Union. A standard approach to economic reform in socialist economies has developed over the last two years, on the basis of both experience, especially in Poland, and analysis (see e.g., Joint Study of the Soviet Economy, 1990; David Lipton and Jeffrey Sachs, 1990; Fischer and Alan Gelb, 1991). We start by reviewing this new orthodox prescription and then examine the developing Russian reform program in its light. We turn next to the special aspects of reform in the former Soviet republics, interrepublican economic relations and reform coordination, and conclude with a brief discussion of the role of the West.

The effects of the length and variability of lags on the conduct of stabilization policy are studied using linear difference equation models. It is shown that long lags by themselves do not impair the effectiveness of active stabilization policy and in fact require its more vigorous use. Variability in lags does reduce the effectiveness of stabilization policy and requires its more cautious use; the relative performance of alternative policies depends upon whether the variability of lags is confined to the direct effects of policy or occurs in the dynamics of the whole system. The cautious use of active stabilization policy is shown to be always stabilizing relative to performance under an inactive policy.

This paper studies trade theory for the case of a continuum of goods, two factors, two countries, and Cobb-Douglas demand functions. If factor endowments are similar, factor price equalization obtains and geographic patterns of production are indeterminate; nonetheless the effects of changes in factor endowments on prices and welfare in each country are well defined. Factor price equalization does not obtain if factor endowments are far apart, and the geographic pattern of specialization is then determinate. The effects of changes in endowments on the range of goods produced in each country and on prices of goods and factors are analyzed for this case, and the elasticity of substitution in production is shown to play an important role in determining comparative static outcomes.

Since 1947, hyperinflations in market economies have been rare. More common have been longer inflationary processes at rates above 100 percent per annum. This paper examines the main characteristics of such very high inflation episodes. We find that (i) almost 20 percent of countries have experienced such episodes; (ii) higher inflation is more unstable; (iii) in high-inflation countries, the relationship between the fiscal balance and seigniorage is strong; (iv) inflation inertia decreases as average inflation rises; (v) high inflation is associated with poor macroeconomic performance; and (vi) stabilizations that rely on the exchange rate as the nominal anchor are expansionary.

Since 1947, hyperinflations (by Cagan’s definition) in market economies have been rare. Much more common have been longer inflationary processes with inflation rates above 100 percent per annum. Based on a sample of 133 countries, and using the 100 percent threshold as the basis for a definition of very high inflation episodes, this paper examines the main characteristics of such inflations. Among other things, we find that (i) close to 20 percent of countries have experienced inflation above 100 percent per annum; (ii) higher inflation tends to be more unstable; (iii) in high-inflation countries, the relationship between the fiscal balance and seigniorage is strong both in the short and longrun’s; (iv) inflation inertia decreases as average inflation rises; (v) high-inflation is associated with poor macroeconomic performance; and (vi) stabilizations from high inflation that rely on the exchange rate as the nominal anchor are expansionary.

The Future of the IMF and World Bank: Panel Discussion by Stanley Fischer, Allan H. Meltzer, Jeffrey D. Sachs and Nicholas Stern. Published in volume 93, issue 2, pages 45-50 of American Economic Review, May 2003