L’hyperinflation Bulgare de 1997: Transition, Fragilité Bancaire et Change

Bulgaria’s Hyperinflation in 1997: Transition, Banking Fragility, and Foreign Exchange

Sebastien Charles and Jonathan Marie

MPRA Paper from University Library of Munich, Germany

Abstract: This article has two objectives: to study the 1997 episode of hyperinflation in Bulgaria and to compare and contrast this analysis with the post-Keynesian theoretical approach. This approach highlights the role of three components observed simultaneously in order to understand the emergence of hyperinflation: a virulent distribution conflict, the presence of indexing mechanisms, and finally flight from domestic currency into one or more foreign currencies. The article reveals that a transitional economy like that of Bulgaria in the 1990s may generate hyperinflation in the absence of any violent distribution conflict: the transition and the banking crisis engender inflation. The foreign exchange rate is decisive in the emergence of hyperinflationary dynamics (and therefore mistrust of domestic currency). Lastly, this interpretation of hyperinflation is confirmed by an econometric analysis.

Keywords: hyperinflation; change; transition (search for similar items in EconPapers)
JEL-codes: C12 E12 E31 P22 (search for similar items in EconPapers)
Date: 2017-01
New Economics Papers: this item is included in nep-mac and nep-tra
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Related works:
Working Paper: Hyperinflation bulgare de 1997: transition, fragilité bancaire et change (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:76459

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