Cash Shortage in the Former Soviet Union

International Monetary Fund

No 1994/067, IMF Working Papers from International Monetary Fund

Abstract: An unexpected shortage of banknotes emerged during 1992 in the former Soviet Union. The cash shortage is explained by the asymmetry in the monetary union that prevailed, under which one member (the Russian Federation) controlled banknote production while every member could create deposit money. Interest rate rigidity forestalled an equilibrating adjustment in demand for banknotes. The possible efficiency costs of the cash shortage are explored.

Keywords: WP; cash shortage; exchange rate; monetary union; price level; cash ruble; cash money; Currencies; Monetary unions; Real interest rates; Deposit rates; Consumption; Baltics (search for similar items in EconPapers)
Pages: 42
Date: 1994-06-01
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