Based on the experience of the Bank of Albania, the paper proposes a framework to estimate the interest rate lower bound in small, open, and euroized economies. The paper introduces a stylized monitoring tool to assess the unintended consequences of low policy rates. The paper is the first...

This paper proposes a methodology to develop empirically based and theoretically consistent deeuroization policies. It is derived from the experience of Albania. The paper is the first attempt to provide an empirical measure of the optimal level of euroization. The results indicate that...

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...

What lessons can be drawn from the unprecedented growth and spectacular collapse of financial pyramid schemes in Albania? This paper discusses the origins of the pyramid schemes and the way the authorities handled them. It also analyzes the economic effects of the pyramid schemes, concluding...

The paper discusses the challenges facing Albania''s fiscal policy following the graduation from the IMF programs. It argues that Albania''s public debt remains too high and needs to be reduced. Strengthening the fiscal framework, including by introducing a numerical fiscal rule, could help...

This paper studies the financial sustainability of the Albanian pension fund and assesses possible options for its reform. The paper concludes that the pension fund is not sustainable in its current form and proposes for the urban scheme a combination of parametric changes to the existing...

This paper examines developments in Albania’s income distribution and poverty during the transition to a market-oriented economy. It pays particular attention to the impact of price liberalization on the agricultural terms of trade and production, the decline in state enterprise employment,...

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...

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...

This paper reviews the developments in the social safety net system of Albania since the beginning of its economic adjustment program in mid-1992 through the third quarter of 1995. It shows that the social safety net system was quickly reformed, and that this allowed Albanian authorities to...