The focus is on ’explosive root VAR’ modelling of money, prices, wages, and exchange rates applied to the Jugoslav high inflation/hyperinflation transition period from a centrally planned economy to a more market oriented economy. The I(2) model, which has previously been used to estimate...

The paper demonstrates that the Yugoslav hyperinflation, the second highest and the second longest episode in economic history, was driven by excessive money supply that monetized various deficits that emerged upon the disintegration of the country. The identified cointegrating relations showed...

A conjecture, advanced by some ad hoc evidence and the theory that money accommodates wage inflation in transition economies, is tested and accepted for Yugoslavia's high inflation of the 1980's. Within a cointegration framework, an overidentified long-run structure is estimated and accepted,...