Hyperinflation Research Papers - Academia.edu (original) (raw)

This paper analyses the period of hyperinflation in Croatia from 1991-1993. First it puts hyperinflation in Croatia 1991-1993 in perspective of legendary historical inflations and more recent ones. The process of hyperinflation is then... more

This paper analyses the period of hyperinflation in Croatia from 1991-1993. First it puts hyperinflation in Croatia 1991-1993 in perspective of legendary historical inflations and more recent ones. The process of hyperinflation is then analyzed in turn. The inflation process in Croatia had several causes: inherited high persistent inflation from former Yugoslavia, fiscal expansion due to war and destruction and inflationary financing of that expansion, and structural problems in banking and real sector, to name the few. After finding some of the causes of the process of hyperinflation the process itself is analyzed and compared with well-known facts. After that, antiinflation program outline and the process of stopping hyperinflation in Croatia of 1993-1994 are examined. The process of stopping inflation is especially analyzed in the view of actions of monetary authorities of Croatia and with a special focus on monetary policy. It was found that monetary policy tightening that started shortly before the introduction of antiinflationary program helped otherwise heterodoxly designed antiinflationary program to succeed.

Zimbabwe has recently experienced record hyperinflation of 80 billion percent a month. This paper uses new data from Zimbabwe to investigate money demand under hyperinflation using an autoregressive distributed-lag model for the period... more

Zimbabwe has recently experienced record hyperinflation of 80 billion percent a month. This paper uses new data from Zimbabwe to investigate money demand under hyperinflation using an autoregressive distributed-lag model for the period 1980-2008. The results produce plausible convergence rates and long-run elasticities, indicating that real money balances are cointegrated with the inflation rate signifying an equilibrium relationship between the two series. Evidence is also presented that suggests prices are being driven by increases in the money supply rather than by changes in price setting behaviour. The paper additionally uses the estimated elasticity on the inflation variable to calculate the maximum level of seigniorage revenue that could be raised in the economy. Actual seigniorage levels increased dramatically after 2000, with inflation eventually exceeding the rate required to maximize this revenue stream. This is discussed in relation to international nancing constraints and the collapse of the domestic tax base.

This paper investigates the impact of mobile technology on Micro and Small Enterprises (MSEs) in the developing world in the post- hyperinflation era. Data was collected from a multi-staged sample of 114 MSE owners within the... more

This paper investigates the impact of mobile technology on Micro and Small Enterprises (MSEs) in the developing world in the post-
hyperinflation era. Data was collected from a multi-staged sample of 114 MSE owners within the capital province of Zimbabwe, Harare. The data was collected and analyzed using descriptive quantitative survey methods, which comprised of hard-copy questionnaires, structured interviews and online questionnaires.
The findings suggest that mobile technology has incremental,
transformational and production influence on MSEs in Zimbabwe. The findings show that mobile technology amplifies communication and relations with customers, MSE’s productivity and MSE’s revenues. Mobile technology is also spurring new and innovative offerings such as mobile money, mobile banking and mobile advertising for the MSEs. This paper also provides the evidence that mobile technology is contributing to the creation of jobs in the indirect mobile industry sector, such as mobile money service and mobile application development. The paper generates insights that inform and compel creation of policies that enable and support the creation and growth of business in the mobile
money, mobile retail services and mobile application development sectors.

The extensive pauperisation of the population in Serbia in the early 1990s, caused by the economic crisis and the UN sanctions, had a tremendous impact on the people’s everyday diet. Many basic, locally produced foods became unavailable... more

The extensive pauperisation of the population in Serbia in the early 1990s,
caused by the economic crisis and the UN sanctions, had a tremendous
impact on the people’s everyday diet. Many basic, locally produced foods
became unavailable as food retailers severely limited their stock to save it
from depreciation caused by hyperinflation. Following the introduction of
the UN embargo, official trade came to a halt and imported foods disappeared
from shops. Limited stock of basic foods, such as flour, sugar, cooking
oil, white bread and milk, was supplied through state-owned food retailers,
but these were rationed and difficult to obtain. However, food scarcity
in early-1990s Serbia boosted the population’s resourcefulness and
creativity on various levels, resulting in increased solidarity, support networks,
barter, smuggling and a return to cooking recipes from the period
of the Second World War. Survival during hyperinflation and the UN embargo
was predicated on transmission of knowledge from the preindustrial
period, suggesting that this was possible mainly because of the
simultaneous coexistence of the pre-industrial and industrial periods in
Yugoslavia. This article will analyse strategies and key actors in the process
of sourcing, procuring and preparing food under these socio-economic
circumstances.

Few words have such long and complex histories, and have held such widespread influence, as those relating to money. Take the word ‘dollar’, for instance, or ‘franc’, ‘rupee’ or ‘drachma’; all terms that will be familiar to most people,... more

Few words have such long and complex histories, and have held such widespread influence, as those relating to money. Take the word ‘dollar’, for instance, or ‘franc’, ‘rupee’ or ‘drachma’; all terms that will be familiar to most people, even if they have never actually used them as currency. A new book written by curators at London’s British Museum takes an alternative approach to monetary history. It uses currency terms such as these as its starting point, discussing historical events through the prism of ten well-known coin names. Some are no longer in everyday use, but they survive as linguistic terms, preserved in vocabulary and literature. They are legacies of trade and migration, and are sometimes revived in new and unexpected ways.

Im nicht akademischen Bereich wird in Deutschland häufig die These vertreten, die Geldmengenausweitungen der EZB müssten zwangsläufig zu einer hohen Inflation oder gar Hyperinflation führen. Dieser Aufsatz geht der Frage nach, ob und wie... more

Im nicht akademischen Bereich wird in Deutschland häufig die These vertreten, die Geldmengenausweitungen der EZB müssten zwangsläufig zu einer hohen Inflation oder gar Hyperinflation führen. Dieser Aufsatz geht der Frage nach, ob und wie eine hohe Inflation oder Hyperinflation in der entwickelten Welt, speziell in der Eurozone, entstehen könnte. Dabei stützt sich die Arbeit auf theoretische Überlegungen zum Thema „Hyperinflation und Inflation“ und entwirft ein mögliches Szenario, in dem eine solche Entwicklung tatsächlich Realität werden könnte. Die Hypothese in dieser Arbeit lautet, dass die größte Gefahr in der Eurozone ein möglicher Ausstieg von Italien und/oder Spanien aus der Währungsunion darstellt. Covid-19 hat das Risiko für eine sehr unterschiedliche wirtschaftliche Entwicklung in verschiedenen Ländern der Eurozone erhöht. Italien und Spanien müssen mit dramatisch steigenden Staatsschulden, einem schwachen Wirtschaftswachstum und Schwierigkeiten auf dem Arbeitsmarkt rechnen. Das Hauptproblem wäre wohl nicht, dass die Eurozone Italien oder Spanien nicht helfen würde, sondern dass der Bevölkerung in diesen Ländern die Hilfsmaßnahmen nicht reichen könnten. Die Eurozone zu verlassen wird in Anbetracht dessen zu einer ernst zu nehmenden Option. Wenn diese Länder aus dem Euro austreten sollten, würde man sich wahrscheinlich für einen geordneten Ausstieg entscheiden. Das heißt, Italien würde nach einer einmaligen Abwertung dem EWS II beitreten und nicht aus der EU austreten. Käme es nicht zu einem geordneten Ausstieg, dann wären ungeordnete Verhältnisse die Folge. Nur in einem solchen Szenario bestünde wirklich das hohe Risiko einer Hyperinflation.

The determination of the causal pattern among inflation, money growth, and exchange rate has important implications for policymakers regarding appropriate stabilization policies in developing economies. Using Congolese data where the pace... more

The determination of the causal pattern among inflation, money growth, and exchange rate has important implications for policymakers regarding appropriate stabilization policies in developing economies. Using Congolese data where the pace of broad money growth and hyperinflation (23,760 % annual change) reached record levels in early 1990s, we use single-equation multivariate autoregressive models with the optimal lag selected using Hsiao’s approach to Granger causality. Results indicate feedback causality between inflation and money growth on one side, and unidirectional Granger causality from money growth to the exchange rate and from the exchange rate to inflation on the other. These results suggest that the over-riding goal of disinflation needs to be accomplished initially by exchange rate stabilization, followed by a direct inflation targeting.

The first impetus to Zimbabwe’s drive to hyperinflation and official dollarization predates the disruption in production caused by the fast-track land reform programme. The initial push came from the departure from relatively disciplined... more

The first impetus to Zimbabwe’s drive to hyperinflation and official dollarization predates the disruption in production caused by the fast-track land reform programme. The initial push came from the departure from relatively disciplined fiscal policies to a string of measures aimed at pacifying restive groups threatening political power through the transfer of economic and financial resources to those groups to the detriment of the fiscus. This stance caused investors to run away from the Zimbabwean currency thus causing currency depreciation hence inducing cost-push inflation which was worsened by the decline in production that accompanied the land reform programme and the associated disturbances to production in all sectors of the economy. The liquidity expansion by the central bank to prop the ruling party embodied in the quasi-fiscal activities veiled as expansionary Keynesian economics played a major role in firmly setting the stage for hyperinflation in the latter stages of t...

This paper seeks to identify what worked and what didn’t work to stop inflation in Argentina in the last seventy years. The approach is descriptive rather than theoretical and examines the relative performance of the only ten... more

This paper seeks to identify what worked and what didn’t work to stop inflation in Argentina in the last seventy years. The approach is descriptive rather than theoretical and examines the relative performance of the only ten stabilization plans that, during the period 1952-2015, lasted at least 24 months. The paper also compares the performance of these plans along other dimensions, such as economic growth, unemployment and income distribution and evaluates the impact of international economic conditions. The analysis sheds light on the debates shock vs. gradualism and orthodox vs. heterodox and puts the current stabilization plan in a historical context.

The determination of the causal pattern among inflation, money growth, and exchange rate has important implications for policymakers regarding appropriate stabilization policies in developing economies. Using Congolese data where the pace... more

The determination of the causal pattern among inflation, money growth, and exchange rate has important implications for policymakers regarding appropriate stabilization policies in developing economies. Using Congolese data where the pace of broad money growth and hyperinflation (23,760 % annual change) reached record levels in early 1990s, we use single-equation multivariate autoregressive models with the optimal lag selected using Hsiao’s approach to Granger causality. Results indicate feedback causality between inflation and money growth on one side, and unidirectional Granger causality from money growth to the exchange rate and from the exchange rate to inflation on the other. These results suggest that the over-riding goal of disinflation needs to be accomplished initially by exchange rate stabilization, followed by a direct inflation targeting.

Buried Alive in a Diamond Covered Casket: Zimbabwe’s Dilemma

This is a new popular book by the Modern Money curator at the British Museum, Thomas Hockenhull. I didn't really write a chapter for it but helped Paramdip Khera draft a section on the Rupee which was later revised by Paramdip,... more

This is a new popular book by the Modern Money curator at the British Museum, Thomas Hockenhull. I didn't really write a chapter for it but helped Paramdip Khera draft a section on the Rupee which was later revised by Paramdip, Tom, and Leigh Gardner (at the LSE) to become the chapter on the Rupee.

German corporations are characterized as having been adaptable in the face of numerous traumatizing events during the twentieth century. This article explores how firms adapted their accounting information systems during the... more

German corporations are characterized as having been adaptable in the face of numerous traumatizing events during the twentieth century. This article explores how firms adapted their accounting information systems during the hyperinflation of the 1920s. It suggests that responses to the crisis focused on system elements identified as key to continuing operations. Initially, firms amended selling and purchasing arrangements, modified financial reporting, and shifted managerial reporting to nonmonetary information. As inflation accelerated, human resources were diverted to maintaining critical functions, especially those related to remunerating labor. While some elements of accounting systems fell into disrepair, there were also examples of innovation.

This paper investigates the impact of mobile technology on Micro and Small Enterprises (MSEs) in the developing world in the post-hyperinflation era. Data was collected from a multi-staged sample of 114 MSE owners within the capital... more

This paper investigates the impact of mobile technology on Micro and Small Enterprises (MSEs) in the developing world in the post-hyperinflation era. Data was collected from a multi-staged sample of 114 MSE owners within the capital province of Zimbabwe, Harare. The data was collected and analyzed using descriptive quantitative survey methods, which comprised of hard-copy questionnaires, structured interviews and online questionnaires. The findings suggest that mobile technology has incremental, transformational and production influence on MSEs in Zimbabwe. The findings show that mobile technology amplifies communication and relations with customers, MSE’s productivity and MSE’s revenues. Mobile technology is also spurring new and innovative offerings such as mobile money, mobile banking and mobile advertising for the MSEs. This paper also provides the evidence that mobile technology is contributing to the creation of jobs in the indirect mobile industry sector, such as mobile money...

This paper seeks to analyse the effects of hyperinflation in Zimbabwe on man-ufacturing sector output over the period 2000 - 2009. Interviews were carried out to find the challenges that hyperinflation pose on the sector. Regression... more

This paper seeks to analyse the effects of hyperinflation in Zimbabwe on man-ufacturing sector output over the period 2000 - 2009. Interviews were carried out to find the challenges that hyperinflation pose on the sector. Regression approach through application of co-integration was also performed to find the relationship between hyperinflation and volume of manufacturing sector out-put. The study revealed that firms in the sector engaged various techniques to crossover the hyperinflationary turmoil. The Granger causality test is conduct-ed in the unrestricted vector autoregressive model and it shows that in the short run hyperinflation reduces manufacturing sector output since the sector is highly monetized and has depreciating assets.

The research attempts to empirically study the demand for money, especially the magnitudes of the price expectation and real cash balance adjustment for Zimbabwe. Price expectation and real cash balance adjustment models are estimated.... more

The research attempts to empirically study the demand for money, especially the magnitudes of the price expectation and real cash balance adjustment for Zimbabwe. Price expectation and real cash balance adjustment models are estimated. The results show that both the interest rate and the rate of change in prices are relevant variables for explaining the variations in the demand for real cash balances in Zimbabwe. Overall, the findings suggest that the Zimbabwean hyperinflation does not appear to have been a self- generating process independent of money supply.

This research examines the success of stabilization policies to control hyperinflation in Bolivia. Money demand functions for the hyperinflation and stabilization periods were econometrically estimated and statistically tested. We... more

This research examines the success of stabilization policies to control hyperinflation in Bolivia. Money demand functions for the hyperinflation and stabilization periods were econometrically estimated and statistically tested. We conclude that the demand for money in Bolivia changed after stabilization policies were implemented, indicating that the new government's objectives were met. Stabilization policies resulted in real economic growth for Bolivia's economy, including its agricultural sector, where agricultural export shares increased tenfold as stabilization policies corrected overvalued exchange rates.