Монголын эдийн засаг: ихэр хямрал

Abstract

In this paper, causes and effects of Mongolian economic and financial crisis is analyzed. Expansions in the real sector and the financial sector, along with foreign factors, led to soaring inflation and inflation stabilization policy of the Bank of Mongolia popped up a bubble in the financial sector, creating liquidity crunch, followed by credit crunch. This policy may have taken the economy out of the crises with modest cost, but when combined with the balance-of-payments crisis caused by non-credible nature of the Bank of Mongolia’s policy and the global financial crisis, domestic economy took a double blow. Policy measures of Mongolia under conditions of IMF reached its goal in the short-term, so we advise Mongolia to implement policy to recover the real economy.