Inflation stabilization, fiscal deficits, and public debt management in Poland

Poland edged toward hyperinflation in the latter half of 1989, but inflatio n fell dramatically after drastic reforms were enacted in January of 1990. We analyze the consistency between fiscal deficits and inflation targets, a nd we assess Poland's domestic and foreign debt management policies and the impact of the Brady debt reduction agreement on the relationship between f iscal deficits and inflation. We also assess the impact of financial sector measures on seigniorage revenue and the sustainability of the low inflatio n strategy. Such policies are shown to have a direct impact on the sustaina bility of inflation targets. (C) 2001 Academic Press.