Yugoslav Hyperinflation 1992-1994

Abstract

This study deals with the topic of Yugoslav Hyperinflation of 1992-1994. Contrary to many works dealing with the most recent episodes of hyperinflation in the Latin American countries there is no work explaining the causes and dynamics of the Yugoslav hyperinflation. What precisely was the setting and monetary policies that led to such an extreme case of hyperinflation? This study explains through the theory of hyperinflation what happens when there is a continuous creation of money by the government and for how long the government can profit from creating money. There is a thorough analysis of the types of monetary abuse the regime of Mr Milosevic resorted to for its own personal benefit, specifically concentrating on the illegal grey issue component of primary money. The conclusion of my thesis is that the hyperinflation was made more severe by Mr. Milosevic and his subordinates with the sole purpose of depriving the people of their foreign currency. This was necessary for the regime of Mr Milosevic to stay in power. This work relied primarily on secondary sources dealing with the economic situation in Yugoslavia of that time. These included chiefly articles from independent Serbian journals as well as a few official government produced documents.