Charles H. Feinstein, Peter Temin, and Gianni Toniolo
- Published in print:
- 2008
- Published Online:
- May 2008
- ISBN:
- 9780195307559
- eISBN:
- 9780199867929
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195307559.001.0001
- Subject:
- Economics and Finance, Economic History
This book surveys the main events in the international economy from the outbreak of the First World War to the end of the Second World War: a period of time variously defined as the “globalization ...
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This book surveys the main events in the international economy from the outbreak of the First World War to the end of the Second World War: a period of time variously defined as the “globalization backlash”, the “Second Thirty Years War”, or simply “the World in Depression”. The book starts with the unfortunate peace settlement after the First World War and progresses to the ensuing hyperinflations and financial crises; from the attempts at rebuilding an international economic and monetary order in the face of rapid technical progress and productivity growth to the policy mistakes that brought about the Great Depression — the most devastating economic depression in human history; from wide-spread long-term unemployment to overall autarky and a second global conflagration. The opening chapter puts the interwar years in the long-term quantitative perspective of economic development over the whole of the 20th century while the final chapter highlights the long-run impact of the interwar years on the growth and policy features of the prosperous decades that followed the end of the Second World War.Less
This book surveys the main events in the international economy from the outbreak of the First World War to the end of the Second World War: a period of time variously defined as the “globalization backlash”, the “Second Thirty Years War”, or simply “the World in Depression”. The book starts with the unfortunate peace settlement after the First World War and progresses to the ensuing hyperinflations and financial crises; from the attempts at rebuilding an international economic and monetary order in the face of rapid technical progress and productivity growth to the policy mistakes that brought about the Great Depression — the most devastating economic depression in human history; from wide-spread long-term unemployment to overall autarky and a second global conflagration. The opening chapter puts the interwar years in the long-term quantitative perspective of economic development over the whole of the 20th century while the final chapter highlights the long-run impact of the interwar years on the growth and policy features of the prosperous decades that followed the end of the Second World War.
Michael Bruno
- Published in print:
- 1993
- Published Online:
- September 2006
- ISBN:
- 9780198286639
- eISBN:
- 9780191603839
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198286635.003.0001
- Subject:
- Economics and Finance, Macro- and Monetary Economics
This chapter begins with a comparison of the recent inflationary experiences of heavily indebted and middle-income countries. It then discusses the historical antecedents of high inflation rates, ...
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This chapter begins with a comparison of the recent inflationary experiences of heavily indebted and middle-income countries. It then discusses the historical antecedents of high inflation rates, chronic high inflation in recent history, the emergence of the ‘heterodox’ approach to stabilization, and structural crisis and reform. An overview of the chapters included in this volume is presented.Less
This chapter begins with a comparison of the recent inflationary experiences of heavily indebted and middle-income countries. It then discusses the historical antecedents of high inflation rates, chronic high inflation in recent history, the emergence of the ‘heterodox’ approach to stabilization, and structural crisis and reform. An overview of the chapters included in this volume is presented.
Bernd Widdig
- Published in print:
- 2001
- Published Online:
- March 2012
- ISBN:
- 9780520222908
- eISBN:
- 9780520924703
- Item type:
- book
- Publisher:
- University of California Press
- DOI:
- 10.1525/california/9780520222908.001.0001
- Subject:
- History, European Modern History
For many Germans the hyperinflation of 1922 to 1923 was one of their most decisive experiences of the twentieth century. This book investigates the effects of that inflation on German culture during ...
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For many Germans the hyperinflation of 1922 to 1923 was one of their most decisive experiences of the twentieth century. This book investigates the effects of that inflation on German culture during the Weimar Republic. It argues that inflation, with its dynamics of massification, devaluation, and the rapid circulation of money, is an integral part of modern culture and intensifies and condenses the experience of modernity in a traumatic way.Less
For many Germans the hyperinflation of 1922 to 1923 was one of their most decisive experiences of the twentieth century. This book investigates the effects of that inflation on German culture during the Weimar Republic. It argues that inflation, with its dynamics of massification, devaluation, and the rapid circulation of money, is an integral part of modern culture and intensifies and condenses the experience of modernity in a traumatic way.
Conan Fischer
- Published in print:
- 2003
- Published Online:
- January 2010
- ISBN:
- 9780198208006
- eISBN:
- 9780191716607
- Item type:
- book
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198208006.001.0001
- Subject:
- History, European Modern History
This book analyses the post-1919 collapse in Franco–German relations, which culminated in 1923 with a Franco–Belgian occupation of Germany's heavy-industrial heartland, the Ruhr District. Germany was ...
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This book analyses the post-1919 collapse in Franco–German relations, which culminated in 1923 with a Franco–Belgian occupation of Germany's heavy-industrial heartland, the Ruhr District. Germany was in technical default of reparations deliveries including coal, coke, and timber and the French Premier, Poincaré, insisted that the occupation sought to secure these assets. German opinion, however, believed that beyond the reparations France was seeking to trigger the break-up of Germany, a belief recently vindicated by leading French historians. The people of the Ruhr rallied to defend their region and country in a grass-roots campaign of passive resistance against the occupying forces, with legal and financial support from Berlin. This book analyses the contours of this struggle which pitted mass civil disobedience against a heavily militarised occupation force. The Franco–Belgian authorities struggled to secure reparations deliveries and assert de facto sovereignty over the Ruhr and neighbouring Rhineland as railwaymen, coal miners, and public officials obstructed them at every turn. This triggered draconian sanctions against the region and sometimes the collective punishment of entire communities. This ‘Battle of the Ruhr’ involved the women and even children of the region as much as the male workforce. Famine, violence, and even sexual abuse came to characterise everyday life. The costs of underwriting this struggle were ruinous for the German exchequer. Hyperinflation rendered the currency worthless, labour relations collapsed, and western Germany was swept by a wave of French-supported separatist risings. Only international mediation (the Dawes Plan) finally resolved the crisis and ushered in a period of Franco–German reconciliation.Less
This book analyses the post-1919 collapse in Franco–German relations, which culminated in 1923 with a Franco–Belgian occupation of Germany's heavy-industrial heartland, the Ruhr District. Germany was in technical default of reparations deliveries including coal, coke, and timber and the French Premier, Poincaré, insisted that the occupation sought to secure these assets. German opinion, however, believed that beyond the reparations France was seeking to trigger the break-up of Germany, a belief recently vindicated by leading French historians. The people of the Ruhr rallied to defend their region and country in a grass-roots campaign of passive resistance against the occupying forces, with legal and financial support from Berlin. This book analyses the contours of this struggle which pitted mass civil disobedience against a heavily militarised occupation force. The Franco–Belgian authorities struggled to secure reparations deliveries and assert de facto sovereignty over the Ruhr and neighbouring Rhineland as railwaymen, coal miners, and public officials obstructed them at every turn. This triggered draconian sanctions against the region and sometimes the collective punishment of entire communities. This ‘Battle of the Ruhr’ involved the women and even children of the region as much as the male workforce. Famine, violence, and even sexual abuse came to characterise everyday life. The costs of underwriting this struggle were ruinous for the German exchequer. Hyperinflation rendered the currency worthless, labour relations collapsed, and western Germany was swept by a wave of French-supported separatist risings. Only international mediation (the Dawes Plan) finally resolved the crisis and ushered in a period of Franco–German reconciliation.
Thomas J. Sargent
- Published in print:
- 2013
- Published Online:
- October 2017
- ISBN:
- 9780691158709
- eISBN:
- 9781400847648
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691158709.003.0003
- Subject:
- Economics and Finance, Economic History
This chapter examines several dramatic historical experiences that are consistent with the “rational expectations” view but that seem difficult to reconcile with the “momentum” model of inflation. ...
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This chapter examines several dramatic historical experiences that are consistent with the “rational expectations” view but that seem difficult to reconcile with the “momentum” model of inflation. The idea is to identify the measures that successfully brought drastic inflations under control in several European countries in the 1920s, namely: Austria, Hungary, Germany, and Poland, all of which experienced a dramatic “hyperinflation” in which, after the passage of several months, price indexes assumed astronomical proportions. The experience of Czechoslovakia is also considered. Within each of Austria, Hungary, Poland, and Germany, there occurred a dramatic change in the fiscal policy regime, which in each instance was associated with the end of a hyperinflation. Czechoslovakia deliberately adopted a relatively restrictive fiscal policy regime in order to maintain the value of its currency.Less
This chapter examines several dramatic historical experiences that are consistent with the “rational expectations” view but that seem difficult to reconcile with the “momentum” model of inflation. The idea is to identify the measures that successfully brought drastic inflations under control in several European countries in the 1920s, namely: Austria, Hungary, Germany, and Poland, all of which experienced a dramatic “hyperinflation” in which, after the passage of several months, price indexes assumed astronomical proportions. The experience of Czechoslovakia is also considered. Within each of Austria, Hungary, Poland, and Germany, there occurred a dramatic change in the fiscal policy regime, which in each instance was associated with the end of a hyperinflation. Czechoslovakia deliberately adopted a relatively restrictive fiscal policy regime in order to maintain the value of its currency.
François R. Velde
- Published in print:
- 2013
- Published Online:
- October 2017
- ISBN:
- 9780691158709
- eISBN:
- 9781400847648
- Item type:
- chapter
- Publisher:
- Princeton University Press
- DOI:
- 10.23943/princeton/9780691158709.003.0009
- Subject:
- Economics and Finance, Economic History
This chapter examines the French Revolution from the vantage point of macroeconomic theories about government budget constraints. From 1688 to 1788, Britain won and France lost three of four wars. ...
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This chapter examines the French Revolution from the vantage point of macroeconomic theories about government budget constraints. From 1688 to 1788, Britain won and France lost three of four wars. France recurrently defaulted on its debt, while Britain did not. After 1688, Britain had reformed its institutions to allow it to raise enough taxes during peacetime to finance debts incurred in times of war, while France sustained institutions designed to constrain the king's revenues. The chapter considers two macroeconomic ideas and three models of money: unpleasant arithmetic, sustainable plans, tax-backed or asset-backed models of the demand for currency, legal restrictions models of the demand for currency, and classical hyperinflation models along lines described by Phillip Cagan. Inflation during the French Revolution are interpreted in terms of a procession of regimes in which the “if” parts of the three types of monetary models are approximately fulfilled.Less
This chapter examines the French Revolution from the vantage point of macroeconomic theories about government budget constraints. From 1688 to 1788, Britain won and France lost three of four wars. France recurrently defaulted on its debt, while Britain did not. After 1688, Britain had reformed its institutions to allow it to raise enough taxes during peacetime to finance debts incurred in times of war, while France sustained institutions designed to constrain the king's revenues. The chapter considers two macroeconomic ideas and three models of money: unpleasant arithmetic, sustainable plans, tax-backed or asset-backed models of the demand for currency, legal restrictions models of the demand for currency, and classical hyperinflation models along lines described by Phillip Cagan. Inflation during the French Revolution are interpreted in terms of a procession of regimes in which the “if” parts of the three types of monetary models are approximately fulfilled.
Conan Fischer
- Published in print:
- 2003
- Published Online:
- January 2010
- ISBN:
- 9780198208006
- eISBN:
- 9780191716607
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198208006.003.0009
- Subject:
- History, European Modern History
This chapter examines the failure of German diplomatic efforts to resolve the Ruhr Crisis during May and June 1923. Deficiencies in the German proposals combined with French intransigence to stymie ...
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This chapter examines the failure of German diplomatic efforts to resolve the Ruhr Crisis during May and June 1923. Deficiencies in the German proposals combined with French intransigence to stymie the initiative, as well as British attempts at mediation. Thereafter, as humanly unbearable conditions undermined law and order in the Ruhr, the Prussian and German authorities were forced increasingly to the Allied will. Communist-inspired strikes and food riots became commonplace. Hyperinflation undermined any orderly payment of wages or salaries and simultaneously undermined most forms of retail commercial activity. Women queued for hours in desperate attempts to secure scraps of food, while their menfolk shuffled to work barefoot and malnourished. Some industrialists began to contemplate collaboration.Less
This chapter examines the failure of German diplomatic efforts to resolve the Ruhr Crisis during May and June 1923. Deficiencies in the German proposals combined with French intransigence to stymie the initiative, as well as British attempts at mediation. Thereafter, as humanly unbearable conditions undermined law and order in the Ruhr, the Prussian and German authorities were forced increasingly to the Allied will. Communist-inspired strikes and food riots became commonplace. Hyperinflation undermined any orderly payment of wages or salaries and simultaneously undermined most forms of retail commercial activity. Women queued for hours in desperate attempts to secure scraps of food, while their menfolk shuffled to work barefoot and malnourished. Some industrialists began to contemplate collaboration.
Barry Eichengreen
- Published in print:
- 1996
- Published Online:
- November 2003
- ISBN:
- 9780195101133
- eISBN:
- 9780199869626
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0195101138.003.0005
- Subject:
- Economics and Finance, Economic History
This chapter and the next describe the fiscal war of attrition that fueled inflation in the 1920s. That war proved most intractable in Germany, where it was fought internationally as well as on the ...
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This chapter and the next describe the fiscal war of attrition that fueled inflation in the 1920s. That war proved most intractable in Germany, where it was fought internationally as well as on the domestic front. The German hyperinflation that resulted from this deadlock is the subject of Ch. 5. The different sections of the chapter look at the background (the post World War I reparations tangle), the transition to hyperinflation, the impact of inflation on the German economy, the stabilization that followed the revaluation of government reserves and pegging of the exchange rate in November 1923, and the implications for international monetary relations.Less
This chapter and the next describe the fiscal war of attrition that fueled inflation in the 1920s. That war proved most intractable in Germany, where it was fought internationally as well as on the domestic front. The German hyperinflation that resulted from this deadlock is the subject of Ch. 5. The different sections of the chapter look at the background (the post World War I reparations tangle), the transition to hyperinflation, the impact of inflation on the German economy, the stabilization that followed the revaluation of government reserves and pegging of the exchange rate in November 1923, and the implications for international monetary relations.
Gerd Hardach
- Published in print:
- 1995
- Published Online:
- November 2003
- ISBN:
- 9780198288039
- eISBN:
- 9780191596230
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198288034.003.0010
- Subject:
- Economics and Finance, Macro- and Monetary Economics, Economic History
The focus of this chapter is not on the short‐term fluctuations experienced by the German banks during the inter‐war period, but on the structural change that ultimately resulted in the formation of ...
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The focus of this chapter is not on the short‐term fluctuations experienced by the German banks during the inter‐war period, but on the structural change that ultimately resulted in the formation of a national banking system. The banking system of the early twentieth century was not a rational construct, but had evolved over the previous hundred years and consisted of a mixture of quite different financial intermediaries defined by a combination of legal provisions, ownership, economic philosophy, and business structure. Post‐war hyperinflation was followed by financial reconstruction, but the system collapsed in the banking crisis of 1931 and was reorganized under the Banking Law of 1934 as a monopolistic structure under strict government surveillance. The resulting system fitted the Nazi regime of armament and autarky, but was not an adequate model for the expanding world economy created after World War II.Less
The focus of this chapter is not on the short‐term fluctuations experienced by the German banks during the inter‐war period, but on the structural change that ultimately resulted in the formation of a national banking system. The banking system of the early twentieth century was not a rational construct, but had evolved over the previous hundred years and consisted of a mixture of quite different financial intermediaries defined by a combination of legal provisions, ownership, economic philosophy, and business structure. Post‐war hyperinflation was followed by financial reconstruction, but the system collapsed in the banking crisis of 1931 and was reorganized under the Banking Law of 1934 as a monopolistic structure under strict government surveillance. The resulting system fitted the Nazi regime of armament and autarky, but was not an adequate model for the expanding world economy created after World War II.
Ljuben Berov
- Published in print:
- 1995
- Published Online:
- November 2003
- ISBN:
- 9780198288039
- eISBN:
- 9780191596230
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/0198288034.003.0015
- Subject:
- Economics and Finance, Macro- and Monetary Economics, Economic History
The first stage in the financial history of Bulgaria after the First World War was a period of hyperinflation and currency depreciation, associated with large budget deficits and rapid expansion of ...
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The first stage in the financial history of Bulgaria after the First World War was a period of hyperinflation and currency depreciation, associated with large budget deficits and rapid expansion of the money supply. This continued until 1923, when the situation was brought under a degree of control by a coup d’etat and restrictions on public expenditure. The economic crisis of 1929–33 saw a sharp fall in prices and a further change in the general direction of policy from a broadly free market to intensive state intervention. This included state controls on the prices of grain and some industrial products, the creation of state monopoly enterprises, and intervention in the exchange regime and in foreign trade. The inter‐war periods also saw the emergence of a central bank with responsibility for the note issue.Less
The first stage in the financial history of Bulgaria after the First World War was a period of hyperinflation and currency depreciation, associated with large budget deficits and rapid expansion of the money supply. This continued until 1923, when the situation was brought under a degree of control by a coup d’etat and restrictions on public expenditure. The economic crisis of 1929–33 saw a sharp fall in prices and a further change in the general direction of policy from a broadly free market to intensive state intervention. This included state controls on the prices of grain and some industrial products, the creation of state monopoly enterprises, and intervention in the exchange regime and in foreign trade. The inter‐war periods also saw the emergence of a central bank with responsibility for the note issue.
Neil R. Ericsson and Steven B. Kamin
- Published in print:
- 2009
- Published Online:
- September 2009
- ISBN:
- 9780199237197
- eISBN:
- 9780191717314
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199237197.003.0017
- Subject:
- Economics and Finance, Econometrics
This chapter assesses the empirical merits of PcGets and Autometrics — two recent algorithms for computer-automated model selection — using them to improve upon Kamin and Ericsson's (1993) model of ...
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This chapter assesses the empirical merits of PcGets and Autometrics — two recent algorithms for computer-automated model selection — using them to improve upon Kamin and Ericsson's (1993) model of Argentine broad money demand. The selected model is an economically sensible and statistically satisfactory error correction model, in which cointegration between money, inflation, the interest rate, and exchange rate depreciation depends on the inclusion of a ‘ratchet’ variable that captures irreversible effects of inflation. Short-run dynamics differ markedly from the long run. Algorithmically based model selection complements opportunities for the researcher to contribute value added in the empirical analysis.Less
This chapter assesses the empirical merits of PcGets and Autometrics — two recent algorithms for computer-automated model selection — using them to improve upon Kamin and Ericsson's (1993) model of Argentine broad money demand. The selected model is an economically sensible and statistically satisfactory error correction model, in which cointegration between money, inflation, the interest rate, and exchange rate depreciation depends on the inclusion of a ‘ratchet’ variable that captures irreversible effects of inflation. Short-run dynamics differ markedly from the long run. Algorithmically based model selection complements opportunities for the researcher to contribute value added in the empirical analysis.
Carol Wise
- Published in print:
- 2020
- Published Online:
- September 2020
- ISBN:
- 9780300224092
- eISBN:
- 9780300252378
- Item type:
- chapter
- Publisher:
- Yale University Press
- DOI:
- 10.12987/yale/9780300224092.003.0004
- Subject:
- Political Science, International Relations and Politics
This chapter undertakes a cross-regional comparison of the developmental paths of China and the Latin American countries of Argentina, Brazil, Chile, Mexico, and Peru (LAC 5). It traces the economic ...
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This chapter undertakes a cross-regional comparison of the developmental paths of China and the Latin American countries of Argentina, Brazil, Chile, Mexico, and Peru (LAC 5). It traces the economic histories and policies implemented within the LAC-5 from the 1950s until the 1980s before turning to China to do the same from the 1980s onward. The author argues that the contrasting underlying logic between the Washington Consensus and the Beijing Consensus can explain the widely divergent outcomes in the development of Latin America and China.Less
This chapter undertakes a cross-regional comparison of the developmental paths of China and the Latin American countries of Argentina, Brazil, Chile, Mexico, and Peru (LAC 5). It traces the economic histories and policies implemented within the LAC-5 from the 1950s until the 1980s before turning to China to do the same from the 1980s onward. The author argues that the contrasting underlying logic between the Washington Consensus and the Beijing Consensus can explain the widely divergent outcomes in the development of Latin America and China.
Bernd Widdig
- Published in print:
- 2001
- Published Online:
- March 2012
- ISBN:
- 9780520222908
- eISBN:
- 9780520924703
- Item type:
- chapter
- Publisher:
- University of California Press
- DOI:
- 10.1525/california/9780520222908.003.0004
- Subject:
- History, European Modern History
This chapter investigates the ways the medium of money itself established a conceptual framework for the experience of the great German inflation. It examines how the hyperinflation damaged the basic ...
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This chapter investigates the ways the medium of money itself established a conceptual framework for the experience of the great German inflation. It examines how the hyperinflation damaged the basic functions of money and how the daily lives of people were affected by the increasing breakdown of the many functions of money. It suggests that the very image and sight of piles of paper money remain among the most striking features of the inflation of that time. It also discusses the role of money as an ideological vessel within the antimodernist discourse of the 1920s.Less
This chapter investigates the ways the medium of money itself established a conceptual framework for the experience of the great German inflation. It examines how the hyperinflation damaged the basic functions of money and how the daily lives of people were affected by the increasing breakdown of the many functions of money. It suggests that the very image and sight of piles of paper money remain among the most striking features of the inflation of that time. It also discusses the role of money as an ideological vessel within the antimodernist discourse of the 1920s.
Ivančič Angela
- Published in print:
- 2008
- Published Online:
- March 2012
- ISBN:
- 9781847420640
- eISBN:
- 9781447302230
- Item type:
- chapter
- Publisher:
- Policy Press
- DOI:
- 10.1332/policypress/9781847420640.003.0014
- Subject:
- Sociology, Comparative and Historical Sociology
At the time of the fall of the Iron Curtain, Slovenia was the wealthiest part of the Socialist Federal Republic of Yugoslavia (SFRY) and had more contact with Western markets. Slovenia, however, also ...
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At the time of the fall of the Iron Curtain, Slovenia was the wealthiest part of the Socialist Federal Republic of Yugoslavia (SFRY) and had more contact with Western markets. Slovenia, however, also inherited a large public debt burden and hyperinflation. These resulted in privatisation processes, the decline of traditional industrial sector, an expansion of the service sector and, as a consequence, a massive loss of jobs for the less qualified industrial labour force. Economic and social restructuring was accompanied by the loss of the employment security and a reduction of social rights provided by the state. In the second half of the 1990s, however, the economy started to recover and unemployment began to decline. This economic growth, which by 2005 had turned into an economic boom, increased the activity rate of the population and transformed Slovenia into one of the most successful new members of the European Union (EU).Less
At the time of the fall of the Iron Curtain, Slovenia was the wealthiest part of the Socialist Federal Republic of Yugoslavia (SFRY) and had more contact with Western markets. Slovenia, however, also inherited a large public debt burden and hyperinflation. These resulted in privatisation processes, the decline of traditional industrial sector, an expansion of the service sector and, as a consequence, a massive loss of jobs for the less qualified industrial labour force. Economic and social restructuring was accompanied by the loss of the employment security and a reduction of social rights provided by the state. In the second half of the 1990s, however, the economy started to recover and unemployment began to decline. This economic growth, which by 2005 had turned into an economic boom, increased the activity rate of the population and transformed Slovenia into one of the most successful new members of the European Union (EU).
Nicole Baerg
- Published in print:
- 2020
- Published Online:
- July 2020
- ISBN:
- 9780190499488
- eISBN:
- 9780190499518
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780190499488.003.0006
- Subject:
- Economics and Finance, Public and Welfare
This chapter moves from studying developed countries to a sample of countries in Latin America over time. The chapter presents evidence that an increase in the information environment, in terms of ...
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This chapter moves from studying developed countries to a sample of countries in Latin America over time. The chapter presents evidence that an increase in the information environment, in terms of its level of precision, exerts an attenuating and significant effect on the mean and standard deviation of forecasters’ inflation expectations, ultimately lowering inflation outcomes. The finding is robust to the inclusion of policy credibility, persistence in inflation, economic output, and month and country effects. When conducting instrumental variable analysis, similarly signed results hold. The main results imply that an increase in information precision helps to lower aggregate levels of inflation and that the channel that this works through is by lowering the weight of prior expectations, as predicted by the theoretical argument. Importantly, the results persist even when considering a sample of countries with relatively variable inflation outcomes and less established (and therefore less credible) economic institutions.Less
This chapter moves from studying developed countries to a sample of countries in Latin America over time. The chapter presents evidence that an increase in the information environment, in terms of its level of precision, exerts an attenuating and significant effect on the mean and standard deviation of forecasters’ inflation expectations, ultimately lowering inflation outcomes. The finding is robust to the inclusion of policy credibility, persistence in inflation, economic output, and month and country effects. When conducting instrumental variable analysis, similarly signed results hold. The main results imply that an increase in information precision helps to lower aggregate levels of inflation and that the channel that this works through is by lowering the weight of prior expectations, as predicted by the theoretical argument. Importantly, the results persist even when considering a sample of countries with relatively variable inflation outcomes and less established (and therefore less credible) economic institutions.
Mark W. Geiger
- Published in print:
- 2010
- Published Online:
- October 2013
- ISBN:
- 9780300151510
- eISBN:
- 9780300151527
- Item type:
- chapter
- Publisher:
- Yale University Press
- DOI:
- 10.12987/yale/9780300151510.003.0008
- Subject:
- History, American History: Civil War
This chapter discusses how the legacy of the war in the South—hyperinflation and debt repudiation—was a disaster for southern creditors, including banks. Southern planters remained the largest ...
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This chapter discusses how the legacy of the war in the South—hyperinflation and debt repudiation—was a disaster for southern creditors, including banks. Southern planters remained the largest landowners in their home counties, even though everyone was poorer than before the war. From this foundation of economic leadership, the antebellum elite regained political control after Reconstruction. In Missouri, because of the forced land sales, planters persisted in the postwar era at lower rates than they would have otherwise. The chapter reveals that in the decades following the war, plantations almost disappeared from the Boonslick, as did nearly the entire African American population. Missouri increasingly differed from the former Confederate states in population, demography, agriculture, land ownership, and politics. In Missouri, the combination of the forced land sales and northern immigration achieved what the Radical Republicans could not in the Confederacy proper.Less
This chapter discusses how the legacy of the war in the South—hyperinflation and debt repudiation—was a disaster for southern creditors, including banks. Southern planters remained the largest landowners in their home counties, even though everyone was poorer than before the war. From this foundation of economic leadership, the antebellum elite regained political control after Reconstruction. In Missouri, because of the forced land sales, planters persisted in the postwar era at lower rates than they would have otherwise. The chapter reveals that in the decades following the war, plantations almost disappeared from the Boonslick, as did nearly the entire African American population. Missouri increasingly differed from the former Confederate states in population, demography, agriculture, land ownership, and politics. In Missouri, the combination of the forced land sales and northern immigration achieved what the Radical Republicans could not in the Confederacy proper.
Marek Dabrowski
- Published in print:
- 2019
- Published Online:
- March 2019
- ISBN:
- 9780198829911
- eISBN:
- 9780191868368
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/oso/9780198829911.003.0059
- Subject:
- Political Science, Comparative Politics
The aim of macroeconomic stabilization is restoring price stability and reducing monetary, fiscal, and balance-of-payment imbalances. Macroeconomic stabilization is particularly needed when a country ...
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The aim of macroeconomic stabilization is restoring price stability and reducing monetary, fiscal, and balance-of-payment imbalances. Macroeconomic stabilization is particularly needed when a country suffers from high inflation or hyperinflation. To stop such an inflation one can choose between three types of anti-inflationary programmes: orthodox money-based, orthodox exchange rate-based, and heterodox. Other cases of macrostabilization policy include reducing excessive fiscal deficit and public debt before they become monetized, dealing with the deflationary consequences of the systemic banking crisis, reducing the excessive current account deficit, dealing with the consequences of a sudden stop in capital flows, and fighting chronic moderate inflation. Fiscal rules, and the independence of monetary and fiscal institutions such as central banks, play an important role in preventing macroeconomic instability. National macroeconomic policies are also monitored from outside, for example by the International Monetary Fund and European Commission (in the case of EU member states).Less
The aim of macroeconomic stabilization is restoring price stability and reducing monetary, fiscal, and balance-of-payment imbalances. Macroeconomic stabilization is particularly needed when a country suffers from high inflation or hyperinflation. To stop such an inflation one can choose between three types of anti-inflationary programmes: orthodox money-based, orthodox exchange rate-based, and heterodox. Other cases of macrostabilization policy include reducing excessive fiscal deficit and public debt before they become monetized, dealing with the deflationary consequences of the systemic banking crisis, reducing the excessive current account deficit, dealing with the consequences of a sudden stop in capital flows, and fighting chronic moderate inflation. Fiscal rules, and the independence of monetary and fiscal institutions such as central banks, play an important role in preventing macroeconomic instability. National macroeconomic policies are also monitored from outside, for example by the International Monetary Fund and European Commission (in the case of EU member states).
Eric Barthalon
- Published in print:
- 2014
- Published Online:
- November 2015
- ISBN:
- 9780231166287
- eISBN:
- 9780231538305
- Item type:
- book
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231166287.001.0001
- Subject:
- Economics and Finance, Behavioural Economics
This book applies the neglected theory of psychological time and memory decay of Nobel Prize–winning economist Maurice Allais (1911–2010) to model investors' psychology in the present context of ...
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This book applies the neglected theory of psychological time and memory decay of Nobel Prize–winning economist Maurice Allais (1911–2010) to model investors' psychology in the present context of recurrent financial crises. Shaped by the behavior of the demand for money during episodes of hyperinflation, Allais's theory suggests economic agents perceive the flow of clocks' time and forget the past at a context-dependent pace: rapidly in the presence of persistent and accelerating inflation and slowly in the event of the opposite situation. The book recasts Allais's work as a general theory of “expectations” under uncertainty, narrowing the gap between economic theory and investors' behavior. The text extends Allais's theory to the field of financial instability, demonstrating its relevance to nominal interest rates in a variety of empirical scenarios and the positive nonlinear feedback that exists between asset price inflation and the demand for risky assets. Reviewing the works of the leading protagonists in the expectations controversy, this volume exposes the limitations of adaptive and rational expectations models and, by means of the perceived risk of loss, calls attention to the speculative bubbles that lacked the positive displacement discussed in Charles P. Kindleberger's model of financial crises. It ultimately extrapolates Allaisian theory into a pragmatic approach to investor behavior and the natural instability of financial markets. It concludes with the policy implications for governments and regulators.Less
This book applies the neglected theory of psychological time and memory decay of Nobel Prize–winning economist Maurice Allais (1911–2010) to model investors' psychology in the present context of recurrent financial crises. Shaped by the behavior of the demand for money during episodes of hyperinflation, Allais's theory suggests economic agents perceive the flow of clocks' time and forget the past at a context-dependent pace: rapidly in the presence of persistent and accelerating inflation and slowly in the event of the opposite situation. The book recasts Allais's work as a general theory of “expectations” under uncertainty, narrowing the gap between economic theory and investors' behavior. The text extends Allais's theory to the field of financial instability, demonstrating its relevance to nominal interest rates in a variety of empirical scenarios and the positive nonlinear feedback that exists between asset price inflation and the demand for risky assets. Reviewing the works of the leading protagonists in the expectations controversy, this volume exposes the limitations of adaptive and rational expectations models and, by means of the perceived risk of loss, calls attention to the speculative bubbles that lacked the positive displacement discussed in Charles P. Kindleberger's model of financial crises. It ultimately extrapolates Allaisian theory into a pragmatic approach to investor behavior and the natural instability of financial markets. It concludes with the policy implications for governments and regulators.
Assaf Razin
- Published in print:
- 2018
- Published Online:
- September 2018
- ISBN:
- 9780262037341
- eISBN:
- 9780262344234
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262037341.003.0001
- Subject:
- Political Science, Political Economy
Israel's high inflation calamity amounted to a crisis of political and economic institutions. Failing economic governance made it essential for the government to raise revenue through money ...
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Israel's high inflation calamity amounted to a crisis of political and economic institutions. Failing economic governance made it essential for the government to raise revenue through money expansion. At the time when the newly elected government was catering to populistic demands, the printing press was used to finance the fast-expanding government spending and transfers. The central lesson from the Friedman (1971) is that steady-state seigniorage from revenue maximizing central bank is small. However, Israel, as well as previous historical episodes, offer a counter example. Inflation spikes can be a significant source for government revenue. Following almost 8 years of the hyperinflation economic chaos, the Israeli voters brought about some major political rebalancing towards the political center. Sargent (2009) argues that high inflation can be stopped quickly, and at a low cost. His argument is that inflationary expectations are quick to adjust when the economic regime shifts considerably. The temptation not to stop inflation in its tracks may be irresistible. Similarly, if the government surprise market participants by abrupt stopping of hyperinflation in the presence of entrenched inflation expectations, the fiscal burden of public sector wage bill and subsidies to basic food must rise. Therefore, the government may hesitate to do so. To overcome this difficulty there must be a full-fledged social agreement between the government, savers (who hold government bonds), public sector wage earners, and recipients of food subsidies. To fix the inflated outlays on debt service, wage bill, and subsidies, some major redistribution of income must accompany the inflation-halting step. This is in essence the lesson from Israel’s inflation stabilization policy.Less
Israel's high inflation calamity amounted to a crisis of political and economic institutions. Failing economic governance made it essential for the government to raise revenue through money expansion. At the time when the newly elected government was catering to populistic demands, the printing press was used to finance the fast-expanding government spending and transfers. The central lesson from the Friedman (1971) is that steady-state seigniorage from revenue maximizing central bank is small. However, Israel, as well as previous historical episodes, offer a counter example. Inflation spikes can be a significant source for government revenue. Following almost 8 years of the hyperinflation economic chaos, the Israeli voters brought about some major political rebalancing towards the political center. Sargent (2009) argues that high inflation can be stopped quickly, and at a low cost. His argument is that inflationary expectations are quick to adjust when the economic regime shifts considerably. The temptation not to stop inflation in its tracks may be irresistible. Similarly, if the government surprise market participants by abrupt stopping of hyperinflation in the presence of entrenched inflation expectations, the fiscal burden of public sector wage bill and subsidies to basic food must rise. Therefore, the government may hesitate to do so. To overcome this difficulty there must be a full-fledged social agreement between the government, savers (who hold government bonds), public sector wage earners, and recipients of food subsidies. To fix the inflated outlays on debt service, wage bill, and subsidies, some major redistribution of income must accompany the inflation-halting step. This is in essence the lesson from Israel’s inflation stabilization policy.
Jan Thiessen
- Published in print:
- 2016
- Published Online:
- April 2016
- ISBN:
- 9780198704744
- eISBN:
- 9780191774041
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780198704744.003.0033
- Subject:
- Law, Legal History
This chapter considers the legal background to and consequences of the German hyperinflation between 1914 and 1948. It discusses how legislators, courts, and lawyers responded to a ‘lack of good ...
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This chapter considers the legal background to and consequences of the German hyperinflation between 1914 and 1948. It discusses how legislators, courts, and lawyers responded to a ‘lack of good money’ that has been produced by German government. The chapter outlines the political, economic, and monetary framework between 1914 and 1925, highlighting its most important legal aspects. It analyses the war economy and the inflation-related case law of the Reichsgericht. Finally, it summarizes the developments during the period, beginning with the revaluation laws of 1924–5 through to the monetary reform of 1948.Less
This chapter considers the legal background to and consequences of the German hyperinflation between 1914 and 1948. It discusses how legislators, courts, and lawyers responded to a ‘lack of good money’ that has been produced by German government. The chapter outlines the political, economic, and monetary framework between 1914 and 1925, highlighting its most important legal aspects. It analyses the war economy and the inflation-related case law of the Reichsgericht. Finally, it summarizes the developments during the period, beginning with the revaluation laws of 1924–5 through to the monetary reform of 1948.