The Tchervonetz: An Illustration in Discriminatory Monetary Policy
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The Tchervonetz: An Illustration in Discriminatory Monetary Policy
Credit and Capital Markets – Kredit und Kapital, Vol. 31 (1998), Iss. 4 : pp. 520–543
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Pierre L. Siklos, Waterloo/Canada and San Diego/USA
References
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Bernholz, P. (1996): "Currency Substitution During Hyperinflation in the Soviet Union, 1922 - 1924", Journal of European Economic History, 25 (Fall): 297 - 323.
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Abstract
This paper interprets the parallel currency experiment in the Soviet Union during the 1920s as an illustration of price discrimination in monetary policy. Using Bryant and Wallace’s (1984) framework, I argue that the introduction of high denomination notes by the Soviets was akin to imposing legal restrictions on their use as a transactions medium. Some econometric evidence is also present to support the implications of the theoretical approach followed. (JEL C22, E31, E58)