TY  - JOUR
AU  - Dornbusch,Rudiger
AU  - Fischer,Stanley
TI  - Stopping Hyperinflations Past and Present
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1810
PY  - 1986
Y2  - 1986
UR  - http://www.nber.org/papers/w1810
L1  - http://www.nber.org/papers/w1810.pdf
N1  - Author contact info:
Rudiger Dornbusch

Stanley Fischer
Governor
Bank of Israel
One Kaplan Street
Jerusalem 91007
ISRAEL
Tel: 9722-655-2701
Fax: 9722-652-8419
E-Mail: sfischer@bankisrael.gov.il
M2  - featured in NBER digest on 1986-05-01
AB  - 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.
ER  -