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The Georgian Hyperinflation and Stabilization
Author:
Mr. Jian-Ye Wang
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Series:
IMF Working Papers
Volume/Issue:
Volume 1999: Issue 065
Language:
English
Publication Date:
01 May 1999
DOI:
https://doi.org/10.5089/9781451848663.001
ISBN:
9781451848663
ISSN:
1018-5941
Pages:
34
Keywords:
WP; exchange rate; central bank; nominal exchange rate; coupon price inflation; Georgia price liberalization; broad money; coupon exchange rate vis-à-vis; exchange rate depreciation; unit of account; real value; coupon vis-à-vis; ruble exchange rate; exchange rate vis-à-vis; coupon economy; coupon inflation; Exchange rates; Currencies; Inflation; Hyperinflation; Monetary base
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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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.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund