Money Creation and the Demand for Money during the Bolivian High Inflation of 1982 to 1985

Bolivia's recent economic history has been dominated by the phenomenon of run away inflation and, up to September 1985, the unsuccessful efforts to contain it. The Bolivian monthly inflation rates from the second quarter of 1984 to third quarter of 1985 were the highest in the world in the last thirty five years and comparable only to those suffered in some Central European nations after both world wars. The high rates of growth of prices during this period characterize a clear case of hyperinflation. While the most acute symptoms of monetary disorder presented themselves in the period mentioned, high inflation rates had appeared since March 1982 when the fixed exchange rate regime collapsed.