Inflation and Monetary Reform

34 Pages Posted: 15 Feb 2006

See all articles by Pierre-Richard Agenor

Pierre-Richard Agenor

University of Manchester - School of Social Sciences

Anna Lennblad

affiliation not provided to SSRN

Date Written: August 1992

Abstract

The introduction of a new currency has often occurred as part of a program to fight hyperinflation. In this context, non-uniform conversion rates for different types of assets and liabilities have been used as a means of reducing an initial "excess" stock of liquidity. The paper examines the anticipatory dynamics associated with such reforms. The analysis suggests that monetary reforms of this type have a deflationary effect upon announcement as well as during the transition period. Under uncertainty about the reform date, the direction of the initial jump in prices upon announcement is a priori ambiguous. Upon implementation, a monetary reform leads to a downward jump in prices.

JEL Classification: E31, E51, F31

Suggested Citation

Agenor, Pierre-Richard and Lennblad, Anna, Inflation and Monetary Reform (August 1992). IMF Working Paper, Vol. , pp. 1-34, 1992. Available at SSRN: https://ssrn.com/abstract=884883

Pierre-Richard Agenor (Contact Author)

University of Manchester - School of Social Sciences ( email )

Oxford Road
Manchester, M13 9PL
United Kingdom

Anna Lennblad

affiliation not provided to SSRN

No Address Available

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