Modern Hyper- and High Inflations

IMF Working Papers, November 1, 2002

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Modern Hyper- and High Inflations

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Bibliographic details

• Authors: Stanley Fischer, Ratna Sahay, Carlos A. Végh Gramont
• Published: November 1, 2002
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781451860023.001

Overview

• Since 1947, hyperinflations (by Cagan’s definition) in market economies have been rare; longer inflationary processes with inflation rates above 100 percent per annum have been much more common.
• The paper uses a sample of 133 countries and adopts the 100 percent threshold as the basis for a definition of very high inflation episodes.
• The analysis examines the main characteristics of very high inflation episodes.

Key findings

• Close to 20 percent of countries have experienced inflation above 100 percent per annum.
• Higher inflation tends to be more unstable.
• In high-inflation countries, the relationship between the fiscal balance and seigniorage is strong both in the short and long run’s.
• Inflation inertia decreases as average inflation rises.
• High-inflation is associated with poor macroeconomic performance.
• Stabilizations from high inflation that rely on the exchange rate as the nominal anchor are expansionary.

Empirical scope and technical approach

• Sample size: 133 countries.
• Threshold for very high inflation episodes: 100 percent per annum.
• Time reference for rarity of hyperinflations: since 1947.

Subjects and thematic focus

• Subjects: Consumption, Fiscal policy, Fiscal stance, Government debt management, Hyperinflation, Inflation, National accounts, Prices, Public financial management (PFM).
• Keywords include: Africa, Caribbean, Consumption, durable goods, Europe, Fiscal deficit, Fiscal stance, Government debt management, growth, Hyperinflation, Inflation, inflation country, inflationary dynamics, Laffer curve, money growth, money-inflation link, nominal exchange rate, rate of inflation, South America, stabilization, WP.

Source: Modern Hyper- and High Inflations, Stanley Fischer; Ratna Sahay; Carlos A. Végh Gramont, IMF Working Papers, November 1, 2002.

Content in this bundle

• Modern Hyper- and High Inflations - WP/02/197, CORRECTED
  • Modern Hyper- and High Inflations - WP/02/197, CORRECTED (Markdown version)
  • Modern Hyper- and High Inflations - WP/02/197, CORRECTED (PDF)