Publication: Postconflict Monetary Reconstruction
Date
2008-01-30
ISSN
1564-698X
Published
2008-01-30
Author(s)
Adam, Christopher
Collier, Paul
Davies, Victor A.B.
Abstract
During civil wars governments typically resort to inflation to raise revenue. A model of this phenomenon is presented, estimated, and applied to the choices and constraints faced during the postconflict period. The results show that far from there being a fiscal peace dividend, postconflict governments tend to face even more pressing needs after than during war. As a result, in the absence of postconflict aid, inflation increases sharply, frustrating a more general monetary recovery. Aid decisively transforms the path of monetary variables in the postconflict period, enabling the economy to regain peacetime characteristics. Postconflict aid thus achieves a monetary "reconstruction" analogous to its more evident role in infrastructure.
Citation
“Adam, Christopher; Collier, Paul; Davies, Victor A.B.. 2008. Postconflict Monetary Reconstruction. World Bank Economic Review. © World Bank. http://openknowledge.worldbank.org/entities/publication/99045dd2-de3f-57ab-8049-1b573e491e09 License: CC BY-NC-ND 3.0 IGO.”
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World Bank Economic Review
1564-698X
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