This paper traces (a) the impact of credit expansion on inflation and (b) the impact of inflation on the real liquidity of households and enterprises. From April 1992 to September 1993 households paid an inflation tax equal to 13.3% of GDP and received almost no new credits. Enterprises received new credits worth 26% of GDP and 'paid' an inflation tax equal to 13% of GDP - a net 'gain' of 13% of GDP. Households received negligible credits and 'paid' an inflation tax equal to 13% of GDP.

---

July 1994     Paper Number CEPDP0200