THE ECONOMICS OF HYPERINFLATION
CEU, Economics Department



Instructor: Pierre L. Siklos
Course: 1 credit

Course Objectives

 This course is intended as an exploration of the Economics of Hyperinflation. Accordingly, we shall examine the principal
theories of hyperinflation as well as theoretical issues in monetary economics that stem from the analysis of the dynamics of
economies under hyperinflationary conditions. The course is sub-divided into four parts, as detailed below. Empirical studies
of countries that have experienced high or hyperinflation will also be considered. It is important that students read ahead the
material that will be covered in class ahead of time. I expect class participation throughout as this is vital to making the material
interesting and to motivate learning. A reading list will be distributed separately and essential material will be labelled with a *.
I hope to make available either a CD-ROM with the essential articles and materials or a course packet.

Topics

#1: THEORIES OF HYPERINFLATION AND THEORETICAL ISSUES IN THE DYNAMICS OF ECONOMIES UNDER HIGH
OR HYPERINFLATION (2 LECTURES)

# 2: SURVEYS OF ECONOMIC PERFORMANCE UNDER HYPERINFLATION (1 LECTURE)
 

#3: ECONOMETRIC ISSUES IN THE STATISTICAL ANALYSIS OF HYPERINFLATION (1 LECTURE)

#4: CASE STUDIES: HISTORICAL AND MORE RECENT EXPERIENCES WITH HYPERINFLATION (2 LECTURES)

Course Evaluation

Type Weight
Policy Paper (due date to be established) 50%
Final Exam (during regular exam schedule) 50%

The final exam will test your understanding of the material highlighted in the reading list to be provided separately. The exam
will take place during the previously scheduled exam period. The policy paper requires you to select an episode of high inflation
(need not be, strictly speaking, hyperinflation in the manner usually defined) and provide some background about its origins,
development, and either termination or ongoing situation. Preferably, you will select a current or recent episode of high or
hyperinflation. Analyses of older historical episodes of hyperinflation will only be permitted under exceptional circumstances.
Alternatively, students may elect to write a comparative essay that examines, for example, more recent episodes of high inflation
in light of the historical experience.You will write a paper intended for the well-informed policymaker (i.e., at the IMF or the World
Bank) in the style that is somewhere between an IMF working paper or an IMF Papers on Policy Analysis and Assessment.
Examples include the IMF working paper (No. 99/65) The Georgian Hyperinflation and Stabilization by Wang, Jian-Ye, or
Designing Disinflation Programs in Transition Economies: The Implications of Relative Price Adjustment  by Coorey, Sharmini
Amrita, Mecagni, Mauro, and Offerdal, Erik, Papers on Policy Analysis and Assessment No. 97/1 (1997). Both can be downloaded
from the IMF’s web site at www.imf.org. It should contain not only some historical description but also some data and some simple
econometric estimates, if data availability permits. The maximum length of the essay, including bibliography, is 20 double-spaced
pages. Details will be discussed more fully in class.