Modern Hyper- and High Inflations

Stanley Fischer, Ratna Sahay and Carlos Vegh

No 8930, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Since 1947, hyperinflations (by Cagan's definition) in market economies have been rare. Much more common have been longer inflationary processes with inflation rates above 100 percent per annum. Based on a sample of 133 countries, and using the 100 percent threshold as the basis for a definition of very high inflation episodes, this paper examines the main characteristics of such inflations. Among other things, we find that (i) close to 20 percent of countries have experienced inflation above 100 percent per annum; (ii) higher inflation tends to be more unstable; (iii) in high inflation countries, the relationship between the fiscal balance and seigniorage is strong both in the short and long-run; (iv) inflation inertia decreases as average inflation rises; (v) high inflation is associated with poor macroeconomic performance; and (vi) stabilizations from high inflation that rely on the exchange rate as the nominal anchor are expansionary.

JEL-codes: E63 F41 (search for similar items in EconPapers)
Date: 2002-05
New Economics Papers: this item is included in nep-ifn and nep-mon
Note: EFG IFM ME
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Citations: View citations in EconPapers (260)

Published as Fischer, Stanley, Ratna Sahay and Carlos Vegh. "Modern Hyper- And High Inflations," Journal of Economic Literature, 2002, v40(3,Sep), 837-880.

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