NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Stopping Hyperinflations Past and Present

Rudiger Dornbusch, Stanley Fischer

NBER Working Paper No. 1810
Issued in 1986
NBER Program(s):   EFG   ITI   IFM

We examine four successful stabilizations from high inflation -- Germany in 1923,Austria in 1922, in Poland 1924-27, Italy 1947 --and the two ongoing attempted stabilization in Israel and Argentina, with the aim of identifying general lessons from those episodes. The key issues in a stabilization are the budget, the exchange rate, and money. Budget deficits were significantly reduced in each case , but were not in all cases completely removed. The exchange rate was pegged in each case , through in all but the Italian case, each stabilization was also preceded by at least one episode in which attempted stabilization through exchange rate pegging was unsuccessful. As pointed out by Sargent and others , money growth rates were high after each stabilization, suggesting that any stabilization that strictly controls the growth of money will produce serious recession. A common feature of stabilizations is a period of extremely high real interest rates.

download in pdf format
   (651 K)

email paper

This paper is available as PDF (651 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w1810

Published: Dornbusch, Rudiger and Stanley Fischer. "Stopping Hyperinflations Past and Present," Review of World Economics (Weltwirtschaftliches Archiv), Vol. 122, no. 1, (March 1986), pp. 1-47.

Users who downloaded this paper also downloaded these:
Sargent The Ends of Four Big Inflations
Dornbusch w1675 Stopping Hyperinflation: Lessons from the German Inflation Experience of the 1920s
Dornbusch w1739 Inflation, Exchange Rates and Stabilization
Dornbusch and Fischer w3896 Moderate Inflation
Fischer, Sahay, and Vegh w8930 Modern Hyper- and High Inflations
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us