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The Success of Currency Reforms to End Great Inflations: An Empirical Analysis of 34 High Inflations


  • Bernholz, Peter

    () (University of Basel)

  • Kugler, Peter

    () (University of Basel)


The estimation of an ordered probit model for currency reforms trying to end 31 NEWLINE hyperinflations and three big inflations of the 20th century shows that the introduction of an NEWLINE independent central bank and the adoption of a credibly fixed exchange rate are crucial for the success NEWLINE of a currency reform. In addition, currency reforms are demonstrated to be more difficult in centrally NEWLINE planned economies than in market economies.

Suggested Citation

  • Bernholz, Peter & Kugler, Peter, 2007. "The Success of Currency Reforms to End Great Inflations: An Empirical Analysis of 34 High Inflations," Working papers 2007/13, Faculty of Business and Economics - University of Basel.
  • Handle: RePEc:bsl:wpaper:2007/13

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    References listed on IDEAS

    1. Paldam, Martin, 1994. "The political economy of stopping high inflation," European Journal of Political Economy, Elsevier, vol. 10(1), pages 135-168, May.
    2. Bomberger, William A & Makinen, Gail E, 1983. "The Hungarian Hyperinflation and Stabilization of 1945-1946," Journal of Political Economy, University of Chicago Press, vol. 91(5), pages 801-824, October.
    3. Makinen, Gail E, 1984. "The Greek Stabilization of 1944-46," American Economic Review, American Economic Association, vol. 74(5), pages 1067-1074, December.
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    More about this item


    Great inflations; currency reforms; central bank independence; fixed exchange rate;

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes


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