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A Novel End to the Big Inflation in China in 1950

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  • Burdekin, Richard C K
  • Wang, Fang

Abstract

The Chinese inflation of 1949-50 was fueled by large budget deficits but was ended in March 1950 before significant deficit reduction occurred. We discuss the fiscal strains that gave rise to this inflation and consider the role played by early Communist market-based anti-inflationary measures such as the "economic warfare" against speculators conducted by the government's state trading companies. While later monetary and fiscal tightening sustained the stabilization achieved in March--at considerable cost to the real economy--the Chinese experience seems to confirm that there is more to inflation stabilization than fiscal balance alone. Copyright 1999 by Kluwer Academic Publishers

Suggested Citation

  • Burdekin, Richard C K & Wang, Fang, 1999. "A Novel End to the Big Inflation in China in 1950," Economic Change and Restructuring, Springer, vol. 32(3), pages 211-229.
    • Handle: RePEc:kap:ecopln:v:32:y:1999:i:3:p:211-29
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    1. Thomas J. Sargent, 1982. "The Ends of Four Big Inflations," NBER Chapters, in: Inflation: Causes and Effects, pages 41-98, National Bureau of Economic Research, Inc.
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    3. Eckstein,Alexander, 1977. "China's Economic Revolution," Cambridge Books, Cambridge University Press, number 9780521291897, September.
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    5. Robert E. Hall, 1982. "Inflation: Causes and Effects," NBER Books, National Bureau of Economic Research, Inc, number hall82-1.
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