The End Of The Hungarian Hyperinflation Of 1945-1946
The rational expectations approach to macroeconomics suggests that hyperinflations were ended abruptly without significant output or unemployment costs. Using new evidence, the author finds that, while transition costs did take place following the Hungarian hyperinflation of 1945-46, they were not linked to the credibility of the regime change. Although the evidence presented actually reinforces the rational expectations interpretation of the end of hyperinflations, the paper also stresses the importance of distinguishing between an economy experiencing high inflation and one emerging from a milder inflation. Copyright 1989 by Ohio State University Press.
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