{
  "title": "The Georgian Hyperinflation and Stabilization",
  "publication": "IMF Working Papers, May 1, 1999",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2016/12/30/the-georgian-hyperinflation-and-stabilization-3020",
  "canonical": "https://www.imf.org/en/publications/wp/issues/2016/12/30/the-georgian-hyperinflation-and-stabilization-3020",
  "overlayPath": "/en/publications/wp/issues/2016/12/30/the-georgian-hyperinflation-and-stabilization-3020/index.md",
  "summary": "This paper anlayzes the Georgian hyperinflation of 1993-94, which featured endogenous fiscal expenditures and the money supply, depreciation, and currency substitution.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- This paper anlayzes the Georgian hyperinflation of 1993-94, which featured endogenous fiscal expenditures and the money supply, depreciation, and currency substitution.\n- 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.\n- 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.\n- The paper also discusses the relatively rapid output recovery in Georgia."
    },
    {
      "heading": "Major findings and analysis",
      "content": "- Hyperinflation period: 1993-94.\n- Key drivers and features identified:\n  - Endogenous fiscal expenditures.\n  - Endogenous money supply dynamics.\n  - Exchange rate depreciation.\n  - Currency substitution.\n- Mechanism for stopping hyperinflation:\n  - Removal of generalized consumer subsidies.\n  - Tightening of monetary policy.\n  - Not driven by a sudden rush of credibility or by imposing an exchange rate anchor ex ante.\n- Role of exchange rate anchor:\n  - A de facto exchange rate anchor operated ex post as a vehicle for building credibility.\n  - This credibility-building ensured a dramatic reversal of currency substitution upon currency reform implementation.\n- Additional discussion:\n  - Relatively rapid output recovery in Georgia following stabilization measures."
    },
    {
      "heading": "Policy implications and recommendations (as presented)",
      "content": "- Eliminate generalized consumer subsidies to curb fiscal-driven inflationary pressures.\n- Tighten monetary policy to accompany fiscal adjustments in halting hyperinflation.\n- Recognize that a de facto exchange rate anchor can function ex post to build credibility and support reversal of currency substitution during currency reform."
    },
    {
      "heading": "Subject classifications and keywords",
      "content": "- Subject: Currencies, Exchange rates, Foreign exchange, Hyperinflation, Inflation, Monetary base, Money, Prices\n- Keywords: broad money, central bank, coupon economy, coupon exchange rate vis-à-vis, coupon inflation, coupon price inflation, coupon vis-à-vis, Currencies, exchange rate, exchange rate depreciation, exchange rate vis-à-vis, Exchange rates, Georgia price liberalization, Hyperinflation, Inflation, Monetary base, nominal exchange rate, real value, ruble exchange rate, unit of account, WP\n\n---\n\n Content in this bundle\n\n- The Georgian Hyperinflation and Stabilization - WP/99/65\n  - The Georgian Hyperinflation and Stabilization - WP/99/65 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - The Georgian Hyperinflation and Stabilization - WP/99/65 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2016/12/30/the-georgian-hyperinflation-and-stabilization-3020"
    }
  ],
  "bullets": [
    "[Markdown version](/en/publications/wp/issues/2016/12/30/the-georgian-hyperinflation-and-stabilization-3020/index.md)",
    "[Structured JSON version](/en/publications/wp/issues/2016/12/30/the-georgian-hyperinflation-and-stabilization-3020/index.json)",
    "[Bundle manifest](/en/publications/wp/issues/2016/12/30/the-georgian-hyperinflation-and-stabilization-3020/bundle-manifest.json)",
    "Authors: Jian-Ye Wang",
    "Published: May 1, 1999",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781451848663.001",
    "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.",
    "Hyperinflation period: 1993-94.",
    "Key drivers and features identified:",
    "Mechanism for stopping hyperinflation:",
    "Role of exchange rate anchor:",
    "Additional discussion:",
    "Eliminate generalized consumer subsidies to curb fiscal-driven inflationary pressures.",
    "Tighten monetary policy to accompany fiscal adjustments in halting hyperinflation.",
    "Recognize that a de facto exchange rate anchor can function ex post to build credibility and support reversal of currency substitution during currency reform.",
    "Subject: Currencies, Exchange rates, Foreign exchange, Hyperinflation, Inflation, Monetary base, Money, Prices",
    "Keywords: broad money, central bank, coupon economy, coupon exchange rate vis-à-vis, coupon inflation, coupon price inflation, coupon vis-à-vis, Currencies, exchange rate, exchange rate depreciation, exchange rate vis-à-vis, Exchange rates, Georgia price liberalization, Hyperinflation, Inflation, Monetary base, nominal exchange rate, real value, ruble exchange rate, unit of account, WP",
    "**The Georgian Hyperinflation and Stabilization - WP/99/65**"
  ],
  "related": [
    {
      "title": "The Georgian Hyperinflation and Stabilization - WP/99/65",
      "role": "document",
      "sourceUrl": "https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/1999/_wp9965.pdf",
      "summary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/1999/_wp9965.pdf.md",
        "mime": "text/markdown"
      },
      "binary": {
        "path": "/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/1999/_wp9965.pdf",
        "mime": "application/pdf"
      }
    }
  ],
  "alternates": {
    "markdown": "/en/publications/wp/issues/2016/12/30/the-georgian-hyperinflation-and-stabilization-3020/index.md",
    "json": "/en/publications/wp/issues/2016/12/30/the-georgian-hyperinflation-and-stabilization-3020/index.json",
    "bundleManifest": "/en/publications/wp/issues/2016/12/30/the-georgian-hyperinflation-and-stabilization-3020/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-09-17T07:47:25.913Z"
}