Sources of macroeconomic instability in the countries with emerging markets | Izvori makroekonomske nestabilnosti u zemljama sa nastajucim trzistima
2009
Njegovan, N.
Macroeconomic instability could be described as a situation involving very hard or impossible prediction of key macroeconomic variables. There are several forms of expressing macroeconomic instability. Four of them are mentioned in the paper and two of them discussed. Model of Debt-Crisis explains the implications of Government bond emmision that causes strong influence on private sector. This way the government is pushing the actual debts to the future periods. If fiscal consolidation is being constantly postponed, monetary expansion becomes inevitable. That is why the second model explains how seignorage needs may produce higher inflation and discusses the implications of that behavior. Both models are in strong relation with the emerging markets economics.
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