signified by a rapid increase in aggregate demand and shortages … The budget deficit reached … 19 per cent of GDP in 1991. The decision to liberalize 90 per cent of prices in January 1992 led to a price jump of 245 per cent and by the summer the monetary overhang had been eliminated. Efforts to tighten monetary policy in 1992–4 failed mainly due to attempts to preserve the rouble zone which after the break-up consisted of fifteen independent countries, each with their own central bank. And although the CBR [Central Bank of Russia], under the leadership of Viktor Gerashchenko, was the only one allowed to print roubles the central banks of other CIS countries (and initially also the Baltic States) could issue credits. This meant that monetary policy spun out of control … More countries started to introduce their own currency or issue monetary surro-gates. Furthermore, much of the credits issued by CIS central banks were used to finance imports of Russian commodities, mainly oil and gas, which meant that pressure was also put on the CBR and the Russian government by Russian exporters to continue looser monetary policy. As a result by mid-1992 the granting of concessional credits to agriculture and industry intensified. At the same time Russia was unable to increase tax revenues or reduce expenditures and as a result continued to run a large budget deficit. And without access to domestic capital markets and a lack of willingness by the West to lend money to Russia, the only source of finance was the printing presses. This policy resulted in a rapid growth of the money supply.

DOI link for signified by a rapid increase in aggregate demand and shortages … The budget deficit reached … 19 per cent of GDP in 1991. The decision to liberalize 90 per cent of prices in January 1992 led to a price jump of 245 per cent and by the summer the monetary overhang had been eliminated. Efforts to tighten monetary policy in 1992–4 failed mainly due to attempts to preserve the rouble zone which after the break-up consisted of fifteen independent countries, each with their own central bank. And although the CBR [Central Bank of Russia], under the leadership of Viktor Gerashchenko, was the only one allowed to print roubles the central banks of other CIS countries (and initially also the Baltic States) could issue credits. This meant that monetary policy spun out of control … More countries started to introduce their own currency or issue monetary surro-gates. Furthermore, much of the credits issued by CIS central banks were used to finance imports of Russian commodities, mainly oil and gas, which meant that pressure was also put on the CBR and the Russian government by Russian exporters to continue looser monetary policy. As a result by mid-1992 the granting of concessional credits to agriculture and industry intensified. At the same time Russia was unable to increase tax revenues or reduce expenditures and as a result continued to run a large budget deficit. And without access to domestic capital markets and a lack of willingness by the West to lend money to Russia, the only source of finance was the printing presses. This policy resulted in a rapid growth of the money supply.

signified by a rapid increase in aggregate demand and shortages … The budget deficit reached … 19 per cent of GDP in 1991. The decision to liberalize 90 per cent of prices in January 1992 led to a price jump of 245 per cent and by the summer the monetary overhang had been eliminated. Efforts to tighten monetary policy in 1992–4 failed mainly due to attempts to preserve the rouble zone which after the break-up consisted of fifteen independent countries, each with their own central bank. And although the CBR [Central Bank of Russia], under the leadership of Viktor Gerashchenko, was the only one allowed to print roubles the central banks of other CIS countries (and initially also the Baltic States) could issue credits. This meant that monetary policy spun out of control … More countries started to introduce their own currency or issue monetary surro-gates. Furthermore, much of the credits issued by CIS central banks were used to finance imports of Russian commodities, mainly oil and gas, which meant that pressure was also put on the CBR and the Russian government by Russian exporters to continue looser monetary policy. As a result by mid-1992 the granting of concessional credits to agriculture and industry intensified. At the same time Russia was unable to increase tax revenues or reduce expenditures and as a result continued to run a large budget deficit. And without access to domestic capital markets and a lack of willingness by the West to lend money to Russia, the only source of finance was the printing presses. This policy resulted in a rapid growth of the money supply.