Macroeconomic Stabilisation

 

Stable macroeconomic frameworks are a fundamental prerequisite for the significant improvement of living standards in countries in transition. They are also the foundation for investment, both domestic and foreign, and thus for sustainable economic development. Creating – and securing – macroeconomic stability must thus be among the primary goals of any macroeconomic policy in transitioning countries.

The former Soviet republics have shared a common development trajectory following the breakup of the Soviet Union. The transition to the new, market-oriented order was accompanied by a series of crises, particularly in the 1990s, before a process of dynamic growth began around the turn of the century.

 

Economies Still Unstable and Prone to Crisis

Nevertheless, the global economic and financial crisis of 2008/2009 was the most recent demonstration of how unstable and prone to crisis the economic structures in these countries still are. The problems typical of economies in transition – high and volatile inflation, frequent depreciation, and vulnerable banking and finance sectors – remain key challenges for economic decision-makers, particularly because of how much they hinder sustainable growth.

 

Development of Monetary, Exchange Rate, and Fiscal Policy

Using applied quantitative analyses, Berlin Economics identified the causes of such negative developments, and offered structural recommendations to address them. These helped decision-makers in the countries concerned to effectively utilize monetary, exchange rate, and fiscal policies.

Other areas of activity included the simulation of economic policy measures – for example in the tax system – along with their effects on economic development. Beyond that, Berlin Economics provided support on other issues, such as the design of monetary and exchange rate policies, by using a combination of international best practices and local experience to develop appropriate suggestions.