Fallout of the Russian Financial Crisis for the Transition Economies

This volume has put forward a simple hypothesis: that the availability of saving in financial instruments that can be issued by the government, enterprises and investors is a critical requirement for positive economic growth and the absence of inflation. In the stabilization period, as noted in earlier chapters, the availability of saving was assured through attraction of foreign saving in the stocks and bonds of the transition economies. This was a successful strategy so long as the supply of foreign saving was sufficient to meet the transition economies’ demands. However, the shortcomings of this approach were made evident in the period surrounding the Russian financial crisis of August 1998