Money and Plan: Financial Aspects of East European Economic Reforms

Money and Plan explores the evolving role of money and finance in East European countries as they implement economic reforms. It discusses the historical background and causes of inflation in Poland, and develops theoretical models to explain the phenomenon. The book also raises important questions about full employment, balance of payments management, sectoral and regional relations, and incomes policy. Czechoslovakia and Hungary are taking steps to introduce a functioning market mechanism and enterprise autonomy in the production sector.

Format: Paperback / softback
Length: 196 pages
Publication date: 29 April 2022
Publisher: University of California Press

Money and Plan delves into the evolving dynamics of money and finance in Eastern European countries as they embark on economic reforms aimed at decentralizing economic decision-making, enhancing enterprise autonomy, and rationalizing economic management. This groundbreaking book stands as the first in the Western world to directly address this critical theme.

In the Stalinist economic system, which prevailed in European communist countries until the mid-1960s and continues to influence many of them today, money occupies a subordinate position. Within the production sector, its utilization in planning and by state-owned enterprises has been tightly restricted and circumscribed. Objectives and performance standards are defined in physical terms, primarily measured in terms of physical units of inputs and output. Similarly, planning is conducted in physical units. While banking and other financial institutions exist, their primary role is to supervise enterprises rather than redistribute national resources or assess commercial prospects. Foreign trade, for the most part, has been conducted on a barter basis.

However, even though money has been employed, it has raised several significant challenges. One of these pertains to chronic inflationary pressure. In the present volume, two contributors delve into the historical record and analyze the root causes of inflation in Poland, while also developing theoretical models to explain this phenomenon.

Inflation is just one of the numerous national economic problems that arise from the adoption of current forms that necessitate the development of new monetary and financial policies. Decentralization also presents significant challenges related to full employment, balance of payments management, sectoral and regional relations, and income policy. As individual enterprises gain more autonomy, monetary and financial mechanisms will play an increasingly important role in addressing these issues, often resembling those developed and practiced in the West.

Weight: 318g
Dimension: 234 x 156 x 13 (mm)
ISBN-13: 9780520307629