Multiple Regime Shifts and Multiple Ends of the Taiwanese Hyperinflation, 1945-1953

We reexamine the behavior of money growth, inflation, and real money balances in post-World War II Taiwan. Our results suggest that the importance of the June 1949 reform package has been overstated. The empirical work reveals an extended period of instability that begins several months prior to the June 1949 announcements and continues until early 1950. This implies that stabilization was achieved only gradually. We also point to the importance of two high-interest deposit programs—introduced in May 1949 and March 1950—in helping account for the Taiwanese authorities' ability to end the inflationary spiral.