Stopping Hyperinflations Past and Present / Rudiger Dornbusch, Stanley Fischer.

Format:

Book

Author/Creator:

Dornbusch, Rudiger.

Contributor:

National Bureau of Economic Research.

Fischer, Stanley.

Series:

Working Paper Series (National Bureau of Economic Research) no. w1810.

NBER working paper series no. w1810

Language:

English

Subjects (All):

Inflation (Finance).

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1986.

Cambridge, Mass. : National Bureau of Economic Research, 1986.

Summary:

We examine four successful stabilizations from high inflation -- Germany in 1923,Austria in 1922, in Poland 1924-27, Italy 1947 --and the two ongoing attempted stabilization in Israel and Argentina, with the aim of identifying general lessons from those episodes. The key issues in a stabilization are the budget, the exchange rate, and money. Budget deficits were significantly reduced in each case , but were not in all cases completely removed. The exchange rate was pegged in each case , through in all but the Italian case, each stabilization was also preceded by at least one episode in which attempted stabilization through exchange rate pegging was unsuccessful. As pointed out by Sargent and others , money growth rates were high after each stabilization, suggesting that any stabilization that strictly controls the growth of money will produce serious recession. A common feature of stabilizations is a period of extremely high real interest rates.

Notes:

Print version record

1986.