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Monetary Overhang and Reforms in the 1940s

by Holger C. Wolf , Rudiger Dornbusch

📖 The Scoop

Post-1945 Europe had many of the traits observed today in Eastern Europe and the Soviet Union: price controls, shortages, black markets and a monetary overhang. The policy response in most countries was monetary reform - - the deliberate immobilization of liquid assets and in many instances an outright write-off of deposits. The paper reviews the historical experience, notably the German reform of 1948, identifies the policy issues involved and draws lessons for today.

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