Olivera, Tanzi, Miloševic: Why was Avramovic’s programme adopted?
It was under the UN sanctions during 1992 and 1993 that hyperinflation hit the FRY. Its leadership believed that the fiscal deficit could be covered by printing money, but such a practice resulted in acceleration of hyperinflation. Former World Bank economist Dragoslav Avramović understood...
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| Format: | Article |
| Language: | English |
| Published: |
Economists' Association of Vojvodina
2022-01-01
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| Series: | Panoeconomicus |
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| Online Access: | http://www.doiserbia.nb.rs/img/doi/1452-595X/2022/1452-595X2202225P.pdf |
| Summary: | It was under the UN sanctions during 1992 and 1993 that hyperinflation hit
the FRY. Its leadership believed that the fiscal deficit could be covered by
printing money, but such a practice resulted in acceleration of
hyperinflation. Former World Bank economist Dragoslav Avramović understood
that stopping printing money should represent the core of his Programme. He
was aware of the Olivera-Tanzi effect, but the fierce attacks on the
Programme in the course of its presentation to the nation’s top leadership
indicated that those people were not - despite the fact that the real value
of all collected taxes decreased to only several tens of millions of US
dollars. It was ultimately Milošević himself who decided that the Programme
should be approved. The economic problems of the FRY ran much deeper. The
involved interests of the nomenklatura in the real sector blocked further
reforms and Avramović was dismissed in 1996. |
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| ISSN: | 1452-595X 2217-2386 |