Yugoslav Inflation and Money
May 1, 1991
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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.
Subject: Bank deposits, Credit, Demand for money, Financial services, Inflation, Monetary base, Money, Prices
Keywords: Bank deposits, base money expansion, base money in Yugoslavia, Credit, currency depreciation, Demand for money, deposit scheme, dinar money, exchange rate, foreign currency, Inflation, inflation objective, Monetary base, monetary policy, money demand, money growth, money stock, NBY assets, NBY credit, policy shift, real rate of interest, WP
Pages:
46
Volume:
1991
DOI:
Issue:
050
Series:
Working Paper No. 1991/050
Stock No:
WPIEA0501991
ISBN:
9781451971064
ISSN:
1018-5941
Notes
Also published in Staff Papers, Vol. 38, No. 4, December 1991.
