Download or read book The Georgian Hyperinflation and Stabilization written by Mr.Jian-Ye Wang and published by International Monetary Fund. This book was released on 1999-05-01 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper anlayzes the Georgian hyperinflation of 1993-94, which featured endogenous fiscal expenditures and the money supply, depreciation, and currency substitution. Hyperinflation was stopped by removing generalized consumer subsidies and tightening of monetary policy, and not by a sudden rush of credibility or imposition of an exchange rate anchor. A de facto exchange rate anchor served ex post as a vehicle for building credibility, which ensured a dramatic reversal of currency substitution when the currency reform was implemented. The paper also discusses the relatively rapid output recovery in Georgia.