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The role of the World Bank and the International Monetary Fund in Czechoslovakia's stabilization program was investigated with respect to their influence on the degree of resource mobilization and the level of policy discussions. The two institutions, which did not maintain relations with the country prior to 1989, contributed to the success of the program through their support of resource transfers. The program's success, however, should also be attributed to other coincidental factors such as tourism and location.

The extent and causes of inflation in the Czech and Slovak Republics for the period 1985-1991 are discussed. The period under consideration marked the transition of those countries from centrally planned economies to free market economies. Inflation was rampant in most countries undergoing the transition. However, the two republics experienced the least inflation, a fact attributed to good economic planning.

Empirical evidence shows that high inflation rates and insufficient productivity growth undermine the rate of protection provided by the exchange rate regime to domestic industries in transition economies. The experience of Bulgaria, Czech Republic, Hungary, Poland, Slovakia and Romania during 1992-1997 supports this conclusion as well as the relationship between exchange rate regimes and commercial policy. It was also found that policymakers were pressured to increase trade barriers to deal with the real appreciation of currencies.