Yugoslav Inflation and Money

Author/Editor:

Ashok Lahiri

Publication Date:

May 1, 1991

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Yugoslav inflation unfolded as a classic wage-price-exchange rate spiral through the 1970s and 1980s and exploded into hyperinflation in the last quarter of 1989. This paper examines the process of monetary accommodation of inflation, the behavior of demand for money, and the interaction between the two in Yugoslavia. The asset-liability structure of the Central Bank, together with the policy stance on exchange and interest rates, led to a significant feedback from inflation to money supply. Real money balances are found to have been cointegrated with other economic variables despite their explosive and seasonal nature, and hence in long-run equilibrium relationship as economic theory would suggest.

Series:

Working Paper No. 91/50

Subject:

Notes:

Also published in Staff Papers, Vol. 38, No. 4, December 1991.

English

Publication Date:

May 1, 1991

ISBN/ISSN:

9781451971064/1018-5941

Stock No:

WPIEA0501991

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

46

Please address any questions about this title to publications@imf.org