The Georgian Hyperinflation and Stabilization
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Summary:
This paper anlayzes the Georgian hyperinflation of 1993-94, which featured endogenous fiscal expenditures and the money supply, depreciation, and currency substitution. Hyperinflation was stopped by removing generalized consumer subsidies and tightening of monetary policy, and not by a sudden rush of credibility or imposition of an exchange rate anchor. A de facto exchange rate anchor served ex post as a vehicle for building credibility, which ensured a dramatic reversal of currency substitution when the currency reform was implemented. The paper also discusses the relatively rapid output recovery in Georgia.
Series:
Working Paper No. 1999/065
Subject:
Currencies Exchange rates Foreign exchange Hyperinflation Inflation Monetary base Money Prices
English
Publication Date:
May 1, 1999
ISBN/ISSN:
9781451848663/1018-5941
Stock No:
WPIEA0651999
Pages:
34
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