This book considers the phenomenon of the high inflation and negative growth experience processes of the 1970s and 1980. It draws substantially on Bruno's experience in Israel, but also ranges through the past and present experience in Latin America (Argentina, Bolivia, Brazil, Chile, and Mexico) and considers the more recent experience of East European economies. The author looks into the common characteristics of such experiences and their possible curesDSwith some emphasis on the lessons of the Israeli experience in respect of the role of incomes policy and the political economy of stabilization.
The discussion of the theoretical underpinnings of stabilization programmes provides an opportunity to blend of a number of disciplines: lessons of economic history, open economy monetary and macro theory, game-theoretic applications to the theory of economic policy design (concepts such as dynamic inconsistency, government reputation, and credibility), and the rationalization of incomes policy.
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