Item description for Market Without Economy: The 1998 Russian Financial Crisis (Soviet and Post-Soviet Politics and Society 40) by Eiji Furukawa Nicola Melloni...
The 1998 financial crisis in Russia was one of the most dramatic economic breakdowns of the last decade. It symbolized the failure of the transition process as it had been conducted since the end of the Soviet Union. There is no general consensus on the reasons behind the collapse of the rouble and a number of contradictory interpretations have been discussed among economists. This book argues that the Russian 1998 financial tur-moil was best predicted by Krugman's and Sargent-Wallace's models. It suggests that the currency collapse had its origins in the peculiar way in which the transition was managed. In particular, the Russian government became trapped by the double constraint of a tight monetary policy imposed by the IMF and a loose fiscal policy needed to support the private sector. These economic policies were inconsistent, and led to inflationary pressure that was postponed by issuing a large amount of Treasury Bonds to finance the fiscal deficit. At the same time, the tight monetary policy retarded the re-covery of the industrial sector. While the particular timing of the crisis was co-determined by other factors, such as the Asian financial crisis and the fall of the oil price, it was this incoherent mix of monetary and fiscal policies that constituted the main cause of the rouble's spectacular collapse in August 1998. The book provides extensive coverage of a decade of Russian reforms. It criticizes neo-liberal ideology and the mode of transition process supported by the "Washington Consensus."
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Est. Packaging Dimensions: Length: 9" Width: 5.5" Height: 0.5" Weight: 0.5 lbs.
Release Date Sep 2, 2006
ISBN 3898214079 ISBN13 9783898214070
Reviews - What do customers think about Market Without Economy: The 1998 Russian Financial Crisis (Soviet and Post-Soviet Politics and Society 40)?
An interesting perspective May 2, 2007
Melloni provides some interesting arguments in his explanation of the Russian crisis. He claims that it was not the falling oil price or the Asian flue to determine the rouble collapse. Instead, he supports the idea that the whole process of reform, and in particular the privatisaion strategy put Russia in a cul-de-sac, forcing the Russian government into a double constraint. On the one side, an international one, imposed by the IMF which forced a tight monetary policy. On the other side, an internal one, imposed by industrialists in order to allow a loose fiscal policy. The result was a skyrocketing public debt which resulted in the August crisis.