Cash Shortage in the Former Soviet Union

June 1, 1994

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

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:
https://doi.org/10.5089/9781451848861.001
Issue:
067
Series:
Working Paper No. 1994/067
Stock No:
WPIEA0671994
ISBN:
9781451848861
ISSN:
1018-5941

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