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Stopping High Inflation: An Analytical Overview

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  • Vegh, Carlos

Abstract

This paper reviews the evidence on stabilization plans in high inflation countries within a unified theoretical framework. The evidence suggests that hyperinflations have been stopped almost instantaneously with no major output costs, while stabilization programs in chronic inflation countries have resulted in an initial expansion followed by a later recession, in addition to a sustained real exchange rate appreciation and current account deficits. These outcomes turn out to be consistent with the predictions of the analytical model.

Suggested Citation

  • Vegh, Carlos, 1991. "Stopping High Inflation: An Analytical Overview," MPRA Paper 20175, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:20175
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    File URL: https://mpra.ub.uni-muenchen.de/20175/1/MPRA_paper_20175.pdf
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    References listed on IDEAS

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    Cited by:

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    2. Emilio Ocampo, 2017. "Fighting inflation in Argentina: A brief history of ten stabilization plans," CEMA Working Papers: Serie Documentos de Trabajo. 613, Universidad del CEMA.
    3. Janet Koech, 2011. "Hyperinflation in Zimbabwe," Annual Report, Globalization and Monetary Policy Institute, Federal Reserve Bank of Dallas, pages 2-12.
    4. José Antonio Ocampo-Gaviria & Carlos Eduardo Caballero Argáez & María del Pilar Esguerra-Umaña & Miguel Urrutia-Montoya & Antonio Hernández-Gamarra, 2023. "Ensayos de historia económica. Cien años del Banco de la República," Books, Banco de la Republica de Colombia, number 2023-isbn:9789586644730 edited by Luis I.Jácome & Samuel Pienknagura & Leonardo Villar Gómez & Esguerra Umaña Pilar, December.

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    More about this item

    Keywords

    inflation; stabilization;

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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