ABSTRACT
On October 8, 1991, Slovenia introduced its own currency, the Slovene tolar, thereby becoming the first among the new economies in transition to achieve monetary independence.1 The introduction of the new currency was justified by the goal of achieving political independence and of isolating the country from Yugoslav inflation. The success of the effort toward independence, however, rested on the achievement of macroeconomic stability, which, in turn, required monetary soundness. Within this context, Slovenia’s currency conversion and achievement of monetary stability offer an interesting example for the study of inflation and of successful stabilization programs.
