ABSTRACT
The Austro-Hungarian empire was created in 1867, and became a rare (and arguably then unique) example of a monetary union between two otherwise independent countries sharing monetary sovereignty based on fiat money rather than gold while retaining independent and fiscal policies and borrowing rights. It broke up in 1919, an early ‘monetary disunion’, after which most parts of the former empire suffered hyper-inflation (see Chapters 24-6) and the three stages of this history have many lessons for later times, particularly for the former Soviet Union and its Eastern European neighbours, and indeed for the European Monetary Union.
