Cash Shortage in the Former Soviet Union
June 1, 1994
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Summary
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.
Subject: Banking, Consumption, Currencies, Deposit rates, Economic integration, Financial services, Monetary unions, Money, National accounts, Real interest rates
Keywords: Baltics, cash money, cash ruble, cash shortage, Consumption, Currencies, Deposit rates, exchange rate, monetary union, Monetary unions, price level, Real interest rates, WP
Pages:
42
Volume:
1994
DOI:
Issue:
067
Series:
Working Paper No. 1994/067
Stock No:
WPIEA0671994
ISBN:
9781451848861
ISSN:
1018-5941
