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Bulgaria’s hyperinflation in 1997: transition, banking fragility and foreign exchange


  • Jonathan Marie

    () (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique)

  • Sébastien Charles

    (LED - Laboratoire D'Economie Dionysien - LED - Université Paris 8)


This article has two objectives: to study the 1997 episode of hyperinflation in Bulgaria, and to compare and contrast this analysis with the post-Keynesian theoretical approach. This approach highlights the role of three components observed simultaneously in order to understand the emergence of hyperinflation: a virulent distributive conflict; the presence of indexing mechanisms; and finally, flight from domestic currency into one or more foreign currencies. The article reveals that a transitional economy like that of Bulgaria in the 1990s may generate hyperinflation in the absence of any violent distribution conflict: the transition and the banking crisis engender inflation. The foreign exchange rate is decisive in the emergence of hyperinflationary dynamics (and therefore mistrust of domestic currency). This interpretation of hyperinflation is confirmed by an econometric analysis.

Suggested Citation

  • Jonathan Marie & Sébastien Charles, 2017. "Bulgaria’s hyperinflation in 1997: transition, banking fragility and foreign exchange," Post-Print hal-01573503, HAL.
  • Handle: RePEc:hal:journl:hal-01573503
    DOI: 10.1080/14631377.2017.1339476
    Note: View the original document on HAL open archive server:

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    Cited by:

    1. Kulesza, Marta, 2017. "Inflation and hyperinflation in Venezuela (1970s-2016): A post-Keynesian interpretation," IPE Working Papers 93/2017, Berlin School of Economics and Law, Institute for International Political Economy (IPE).


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