The Georgian Hyperinflation and Stabilization

Author/Editor:

Jian-Ye Wang

Publication Date:

May 1, 1999

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

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:

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.

Series:

Working Paper No. 1999/065

Subject:

Currencies Exchange rates Foreign exchange Hyperinflation Inflation Monetary base Money Prices

English

Publication Date:

May 1, 1999

ISBN/ISSN:

9781451848663/1018-5941

Stock No:

WPIEA0651999

Pages:

34

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