Experiences with Extreme Monetary Instability
In early 1990, Argentina, Brazil, Peru, Yugoslavia and Poland were experiencing extreme instability or, at least, the early stages of stabilization. Other countries, like Bolivia, had already run the course and stabilized or, like Mexico, had avoided the extreme experience and opted for stabilization promptly and decisively. The lessons from these case studies, and from the earlier experiences of the 1920s and 1940s, have still to be drawn. Exactly the same themes come up each time. The paper investigates the dynamics of high inflation and the essential steps in stabilization.
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