CASH SHORTAGE IN THE FORMER SOVIET-UNION

An unexpected shortage of banknotes emerged during 1992 in the former Soviet Union. The cash shortage is explained by the asymmetry in the m onetary union that prevailed, under which one member, the Russian Fede ration, controlled banknote production while every member could create deposit money. Adjustments in interest rates or the cash-deposit exch ange rate could have mitigated the shortage. The possible efficiency c osts of the cash shortage are explored. (C) 1996 Academic Press, Inc.