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Provides information on different factors which caused the inflationary experiences of Weimar Germany in the 1920s and Russia after communism collapsed in the 1990s. Discussion on the economic policies of the two countries; Details on the political and social consequences of inflation; Analysis of the banking system and expenditures of the two countries.

By the end of 1992, Russia stood at the brink of hyperinflation. This article identifies the main cause as an uncontrolled increase in the money supply related to the budget deficit, and central bank credits to enterprises, and to the rouble zone. These create a vicious inflationary cycle, which will be difficult to break since the political forces representing old Soviet economic structures have undermined stabilization policies. The article concludes that though macro-economic stabilization is not a sufficient condition for the market-oriented transformation of the Russian economy, it remains a necessary one, without which the reform will fail. [ABSTRACT FROM AUTHOR]