The Georgian Hyperinflation and Stabilization

Jian-Ye Wang

No 1999/065, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; exchange rate; central bank; nominal exchange rate; coupon price inflation; Georgia price liberalization; broad money; coupon exchange rate vis-à-vis; exchange rate depreciation; unit of account; real value; coupon vis-à-vis; ruble exchange rate; exchange rate vis-à-vis; coupon economy; coupon inflation; Exchange rates; Currencies; Inflation; Hyperinflation; Monetary base (search for similar items in EconPapers)
Pages: 34
Date: 1999-05-01
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Citations: View citations in EconPapers (4)

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