1992 to 1911 what was estonias currency called

The authors would like to thank many colleagues, and especially Agu Lellep, Anton Op de Beke, and Ratna Sahay, for their perceptive comments and suggestions.

All errors are, of course, the responsibility of the authors, and the views expressed do not necessarily reflect those of the Fund. However, even the authors have on occasion found themselves a bit short. Contributions will be acknowledged. In the context of Austria, de Bordes p. In those days one could not pick up a Viennese newspaper without finding complaints regarding the shortage of money. Industries had the greatest difficulty in collecting sufficient quantities of notes to pay the wages; the banks would not undertake, even for their best customers, to supply the necessary notes for that purpose at fixed dates.

In early September, an acute shortage forced the Bank of Slovenia to put into circulation bank notes that had already been withdrawn. Appendix 1, p. According to the Washington Post. In an attempt to keep pace with the demand for cash, the government printed billion rubles in July alone - -more money than was printed in the entire Soviet Union from to Irving Fisher argued that the relative demand for currency and deposits plays an important role in the explanation of business cycles.

Continued interest In the study of the demand for currency and deposits is indicated by papers by Cagan , Feige , Hess , Becker , Santomero There are obvious difficulties in compiling historical monetary statistics for the new republics when they were formerly part of the unified economic system of the Soviet Union. Thus, monetary figures are illustrative and should be treated with caution. The currency-to-deposit ratio varied widely among the republics from 10 percent in Belarus to A large part of this variation may be due to the different degrees of development of the banking system and industrialization In the republics.

Per capita money was derived as the ratio of aggregate money holdings to aggregate population in thirteen republics of the FSU in Data for were not available for Tajikistan and Uzbekistan. Restrictions were reapplied in Russia from January The Gorbachev premium was initially funded by the issue of long-term Union Government debt to the savings bank.

The ambiguous status of this debt after the dissolution of the Union led to the initial freezing of these augmented deposits until ; however, Russia withdrew the freeze in mid, and some other republics followed suit. In a legally anomalous way, the issue of currency rubles remained the responsibility of Gosbank USSR between January 1, and the end of May , although the Gosbank Itself had ceased to exist.

Some localities resorted to extraordinary measures. For example, in mid-March , it led the municipal Government in the south Estonian town of Tartu to introduce its own currency to combat the acute shortage of ruble. The index number problem applies to both the PPI and the CPI, but the upward bias in estimated inflation rates itself Increases with inflation. Data is available only on issues and withdrawals of banknotes by Republic. Insofar as interrepublican trade was paid for in cash, stocks in circulation will have differed from cumulative net issues.

The Latvian ruble was Initially introduced as an interim currency to circulate at par and alongside the Russian ruble. The Latvian ruble was delinked from the Russian ruble on July 20, , and started to float against all foreign currencies, including the ruble. During , the percentage increase in currency in real terms in Latvia was smaller than in Estonia, partly because of the difference in the timing of the currency reform in the two countries.

Part of this divergence reflects differences in the methodology used In the construction of price indices, as well as the relative speed of price liberalization. It could be argued that economic policy in the Federal Socialist Republic of Yugoslavia illustrated these biases.

This overlapping generations structure is a simple way to introduce the intertemporal considerations that help determine the allocation of wealth between cash and deposits.

The model could be adapted to allow for longer-lived individuals, but the dynamics would be more complex. With fixed output and no storage, the government does not have to consider intertemporal issues if It is indifferent about the distribution of consumption between cohorts.

This indeterminacy is similar to that found in Sraffa The results are not substantially changed if the governments have to pay for their purchases in cash. The relationship between nominal and real interest rates depends of course on the price level expected next period, which in turn depends on whether the monetary union survives and whether the cash supply remains restricted.

Price expectations need not be specified here provided they are taken to be fixed. The cash shortage could be made even worse if the goods markets are also in disequilibrium. In several republics of the FSU, some prices are still controlled and the corresponding goods are somehow rationed.

Calvo and Kumar use a similar framework, but assume that labor productivity in the informal sector determines the real wage. It is easy to work through the model presented here assuming a fixed real wage and allowing unemployment. They also point out that the model can be reinterpreted as one of labor shirking. See Fischer for a discussion of general issues relevant in consideration of the case for a national money. All Rights Reserved. Topics Business and Economics.

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Diseases: Contagious. Diseases: Respiratory. The stamping operation undertaken by the states constituted the first of these two actions. Stamping Austro-Hungarian banknotes with a national stamp and making only stamped notes legal tender immediately created a national currency, the stock of which was determined by the rules governing the stamping operation and the ease with which the stamps could be forged. The real demand for the new currency dictated whether notes would be smuggled in and affixed with a forged stamp, or smuggled out and stamped elsewhere.

By setting a disadvantageous rate of exchange against the domestic currency or by being one of the first to stamp the notes a Successor State could easily push notes onto the other states. However, the fundamental aspect of a currency reform is not the exchange of new banknotes for old, or even the creation of a new national monetary authority, but the effective exercise of control over the supply of these notes after the reform.

Thus, in Czechoslovakia, the banking office was forbidden to lend to the government, which immediately resulted in the stabilization of the Czech crown since the public recognized that the impetus behind the monetary expansion was eliminated. Likewise, stabilization was achieved for the Austrian and Hungarian crowns only after the League of Nations reconstruction agreements that accomplished the same separation of central bank operation from government deficits.

This episode suggests five lessons for currency reform elsewhere. First, currency separation can be accomplished relatively quickly. This initial operation will necessarily be followed by an exchange of stamped notes for new national currency, but it buys time for the authorities to plan the second stage carefully.

Third, if currency reforms are not conducted simultaneously throughout the former currency union, differential conversion rates for the old currency will create incentives for individuals to spend or exchange their old notes in the region where they are most valuable.

The imposition of a tax, or differential expected rates of inflation, creates another incentive to move notes to escape the tax.

Thus, old notes will flow into those countries with the most favourable tax-inclusive real conversion rate. Breakaway reforms elsewhere may cause people to sell their old notes for goods and assets in those states where they are still legal tender.

The last state to convert the old notes will then absorb both the notes originally circulating in its territories and many of the notes previously circulating elsewhere. A liquidation of old central bank assets prorated on the amount of currency collected will only partially compensate for the lost goods. Finally, currency reform will succeed in creating a stable medium of exchange only if it is accompanied by sound fiscal and monetary policies.

In this respect it is not necessary for fiscal restraint to precede currency reform if the new monetary authorities are constrained in their ability to extend credit to the state. In each of the Successor States, fiscal equilibrium was attained as a consequence of the currency reform, rather than as a precondition of it. All Rights Reserved. Topics Business and Economics. Banks and Banking. Corporate Finance. Corporate Governance. Corporate Taxation.

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EML 9 Nov - 24 Feb Republic of Estonia in Exile: alternative administration not internationally recognized. Russian troops were present in Estonia until 31 Aug The former exile government gave its mandate to the constitutional ly elected government in Tallinn. The new exile government set up on 15 Sep is not recognized by any nation. Territorial Disputes: Russia and Estonia in May signed a technical border agreement, but Russia in Jun recalled its signature after the Estonian parliament added to its domestic ratification act a historical preamble referencing the Soviet occupation and Estonia's pre-war borders under the Treaty of Tartu; Russia contends that the preamble allows Estonia to make territorial claims on Russia in the future, while Estonian officials deny that the preamble has any legal impact on the treaty text; Russia demands better treatment of the Russian-speaking population in Estonia; as a member state that forms part of the EU's external border, Estonia implements strict Schengen border rules with Russia.

Ritterschaftshauptmann — Friedrich von Sasse d. Pro-Soviet Resistance to German occupation Note : Soviet resistance, consisting mainly of straggling party-members and soldiers, organized into partisan units subordinated to the Central Staff of the Partisan Units in Moscow. World Statesmen. Re-adopted 8 May Map of Estonia. Text of National Anthem Adopted , re-adopted