Journal Article

Money demand and inflation in Peru, 1979-1991

Abstract: The author, a junior at Bowling Green State University in Ohio, won the Federal Reserve Bank of Cleveland?s first annual undergraduate economics essay competition in 2000. His essay, now reprinted as an Economic Commentary, explores the factors that affected money demand during a period of terrible hyperinflation in Peru and considers whether the government caused the hyperinflation by printing too much money in order to increase seigniorage revenue. Hyperinflation may seem to be a problem most countries have learned to avoid, but the leaders of many emerging economies face tough financial challenges. For some, generating revenue by overprinting currency to meet fiscal expenses may be a hard temptation to resist, but it is essential to recollect hyperinflation?s causes and its devastating consequences.

Keywords: Peru; Demand for money; Inflation (Finance);

Bibliographic Information

Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 2000

Issue: Dec

Order Number: 1