INFLATION IN THE CZECH AND SLOVAK REPUBLICS, 1985-1991

This paper is a review of Czech and Slovak literature, and it assesses the extent of inflation in the former Czechoslovakia during the period 1985-1991. This period covers the last few years of central planning and the impact of the transformation from central planning to a full-fledged market economy. The most remarkable feature of all indicators of inflation in Czechoslovakia is the relatively low level of inflation in comparison to most centrally planned economies, even after allowing for the effects of hidden and suppressed inflation. This favorable development also had favorable policy implications for price liberalization in 1990 and 1991 because prices were freed in the presence of a relatively smaller inflationary gap. (C) 1994 Academic Press, Inc.