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Modern Hyper- and High Inflations

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  • Stanley Fischer
  • Ratna Sahay
  • Carlos A. Végh Gramont

Abstract

Since 1947, hyperinflations in market economies have been rare. More common have been longer inflationary processes at rates above 100 percent per annum. This paper examines the main characteristics of such very high inflation episodes. We find that (i) almost 20 percent of countries have experienced such episodes; (ii) higher inflation is more unstable; (iii) in high-inflation countries, the relationship between the fiscal balance and seigniorage is strong; (iv) inflation inertia decreases as average inflation rises; (v) high inflation is associated with poor macroeconomic performance; and (vi) stabilizations that rely on the exchange rate as the nominal anchor are expansionary.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 02/197.

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Length: 65
Date of creation: 01 Nov 2002
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Handle: RePEc:imf:imfwpa:02/197

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