Wednesday, October 10, 2007

Ukraine Overheating Too

It's not just the Baltic states that have a problem with inflation. Ukraine has it too, with consumer prices being up 8.6% since December 2006 and 14.4% since September 2006.

In Ukraine, inflation is home made and not, as in the Baltic states a result of a currency peg. Of course, my recommendation to the Baltic states to drop the peg only applies if they do it in other to reduce inflation. If they were to inflate as much or more on their own, as in Ukraine, then it would be better to keep the peg,


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