Analysis of success factors of transition: Focusing on monetary and employment policy in the Czech republic

Abstract

Judging that factors that enabled the Czech Republic to pursue rapid, continuous and comprehensive reforms immediately after the transition were the effective control of inflation and unemployment, the purpose of this paper is to examine factors that succeeded in price and employment stability through monetary and employment policies. This article confirms that the Czech Republic succeeded in quickly addressing hyperinflation and high unemployment through austerity monetary policy and active employment policy, which served as an asset for continuous reform implementation. This fact suggests lessons for other countries that are promoting or will promote economic reform, that can only pursue further reforms with the support of the people only when they achieve price and employment stability.