Contents -- I. INTRODUCTION -- II. MACROECONOMIC DEVELOPMENTS IN GEORGIA -- III. MODEL OF INFLATION -- IV. CONCLUSIONS -- APPENDIX I. TESTS FOR STATIONARITY -- REFERENCES
Summary
The paper explains the behavior of inflation in Georgia in the post-stabilization period. A long-run equation linking prices to money and the exchange rate, as well as a short-run, dynamic equation for inflation are estimated. The inflation equation is stable, points to a dominant role of the exchange rate in the behavior of inflation and shows a low persistence of inflation in Georgia. The equation explains well the behavior of inflation after the Russian crises, when inflation increased sharply but was quickly brought under control, as the National Bank of Georgia kept its monetary policy tight and the exchange rate stable
Notes
Cover title
"November 2003"--Caption
Bibliography
Includes bibliographical references (page 22)
Notes
At head of title: European II Department
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