ABSTRACT
This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book considers a number of the most important aspects of the political economy of inflation. It focuses on proposals for the development of monetary institutions that will help combat the political and economic pressures to generate inflation. The book presents case studies that highlight a number of the key factors which have contributed to success in controlling inflation in some countries and to failure in many more. The contribution of bad economic policy advice to the failures of the economic reform process has generally been far outweighed by failures of political reform that have generated pressures to slow economic liberalization and to follow highly inflationary budget policies. Short-run political pressures, frequent in the relatively stable democracies, are likely to be even greater in newly emerging democracies.
