There has been fierce debate about the optimal sequencing of economic reforms in emerging market economies. Many economists argue that for market-oriented systems to operate effectively, a reasonable degree of monetary stability is necessary. Rampant inflation, a common challenge for emerging economies, greatly reduces the chances that market-orien

Introduction: The Political Economy of Establishing Monetary Stability -- Aspects of the Political Economy of Inflation -- The High Costs of Monetary Instability -- Budget Deficits and Inflation: The Importance of Budget Controls for Monetary Stability -- Inflation and Optimal Seigniorage in the CIS and Eastern Europe -- The Politics of Inflation: An Empirical Assessment of the Emerging Market Economies -- Institutional Mechanisms for Promoting Economic Stability -- Guidelines for Constructing Monetary Constitutions -- Designing Central Bank Arrangements to Promote Monetary Stability -- Central Banking in Economies in Transition -- Alternative Approaches to Monetary Reform in the Formerly Communist Countries: A Parallel Strategy -- Case Studies -- The Russian Central Bank and the Conduct of Monetary Policy -- Impediments to the Macroeconomic Stabilization of Russia -- The Collapse of the Ruble Zone, 1991-93 -- The Latvian Monetary Reform -- Fiscal and Monetary Policies in the Transition: Searching for the Credit Crunch