Can the Release of a Monetary Overhang Trigger Hyperinflation?

Osband, Kent

It is widely feared that, once prices are decontrolled in the formerly centrally–planned economies, households’ release of previously accumulated money will trigger a hyperinflation. This paper finds, instead, that whether a country’s fiscal, monetary, and labor market policies are destabilizing typically does not depend on the money stock. However, the release of a monetary overhang can precipitate a large initial real wage shock. To the extent such a shock is not feasible politically, there is a motive for monetary reform, which must be weighed against the cost of reduced public confidence in money

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Year of publication:	1992
Authors:	Osband, Kent
Other Persons:	Osband, Kent (contributor) ; Lin, Shoukang (contributor)
Publisher:	Washington, D.C : International Monetary Fund
Subject:	Hyperinflation \| Theorie \| Theory \| Geldmenge \| Money supply \| Geldpolitik \| Monetary policy \| Inflationsbekämpfung \| Anti-inflation policy \| Inflation