ABSTRACT
This chapter examines attempts to build central banking institutions in Bulgaria, the Czech Republic, Hungary, Poland, Slovakia and Slovenia. It attempts to strike a balance between analysis and factual information by concentrating on issues and facts which, it is hoped, will be of longer-term interest. A functioning market economy requires institutions that lay down and enforce the "rules of the game." Robert Holzmann and Georg Winckler have rightly pointed to the important role social institutions can play in transitional economies by backing sound economic policies, particularly stability-oriented monetary policy. A centrally planned economy typically concentrates on producing physical output as envisaged by an elaborate plan. Central planning has resulted in economies with massively distorted prices, low household savings and a preference by entrepreneurs to accumulate real assets in the form of inventories and plants. "The NBH supports the implementation of the economic policy programme of the government with monetary policy means available to it".
