Short waves in Hungary, 1923 and 1946: Persistence, chaos, and (lack of) control

Christopher Hartwell

Journal of Economic Behavior & Organization, 2019, vol. 163, issue C, 532-550

Abstract: Monetary policies follow a complex and chaotic process, one that is enhanced when monetary growth is taken to the extreme, as in hyperinflation. While we have a basic understanding of the complex dynamics of hyperinflation, a less-explored phenomenon accompanying hyperinflationary episodes is the effect that they have on institutional development. Building on recent advances in economic history examining monetary policy and institutions, this analysis uses more explicit recourse to complexity theory and in particular complex adaptive systems to examine two separate hyperinflationary episodes in Hungary, 1923 and 1946. Delving into the institutional and cultural roots of the inflationary policies of the Hungarian government and detailing the institutional effects which succeeded hyperinflation, this paper shows that the twin experiences of Hungary were both chaotic and created a chaotic and complex aftermath, the results of which are still being felt. Indeed, Hungary's 1923 and especially its 1946 hyperinflation shows that some economic chaos cannot be restrained by political institutions and in fact the institutions themselves were changed. When staring into the abyss, Hungary also found that the abyss stared back.

Keywords: Hyperinflation; Complex adaptive systems; Chaos; Monetary policy; Hungary (search for similar items in EconPapers)
JEL-codes: B52 E42 N14 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167268119301428
Full text for ScienceDirect subscribers only

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:eee:jeborg:v:163:y:2019:i:c:p:532-550

DOI: 10.1016/j.jebo.2019.05.003

Access Statistics for this article

Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.

More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().