Economic and political uncertainty, high inflation and liberalization of foreign exchange restrictions have encouraged substantial currency substitution in the economies in transition. This paper presents empirical evidence on currency substitution in four Eastern European countries in...

Fiscal problems are widely recognized as a key factor behind persistent inflation in Eastern Europe post-1989. Deficits need to be cut back, but how much for a given inflation target? We develop a simple framework on debt, deficit and inflation to study the fiscal and monetary policy...