Stopping Hyperinflations Past and Present

Rüdiger Dornbusch and Stanley Fischer

No 1810, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

Date: 1986-01
Note: EFG ITI IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (80)

Published as Dornbusch, Rudiger and Stanley Fischer. "Stopping Hyperinflations Past and Present," Review of World Economics (Weltwirtschaftliches Archiv), Vol. 122, no. 1, (March 1986), pp. 1-47.

Downloads: (external link)
http://www.nber.org/papers/w1810.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:1810

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w1810

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().