The paper deals with the two parts of the short-run adjustment problem in developing countries: the improvement of the current account and the reduction of inflation, the main cause in both cases being usually a fiscal deficit. It is shown how the two parts are related. Distinctions are made...

This paper is intended to clarify the contribution of macroeconomic stabilization and structural adjustment to the transformation from plan to market in Central and Eastern Europe and elsewhere. Four main points emerge. First, increased price stability improves the utilization of capital and...

In late 1979, Turkey stood in the throes of a foreign exchange crisis, with widespread shortages, negative growth, and inflation into triple digits. A decade later, Turkey has a comfortable balance-of-payments situation, and sits atop considerable foreign exchange reserves. The economy has...

Sudden, asymmetric shifts in investor sentiment known as 'flights-to-safety' typically emanate from center economies but propagate globally. In the absence of policy intervention, these financial shocks can spill over and destabilize macroeconomic conditions in many countries. This paper...