Steve H. Hanke

Email: hanke@jhu.edu


Steve H. HankeSteve H. Hanke is a Professor of Applied Economics and Founder and Co-Director of the Institute for Applied Economics, Global Health, and the Study of Business Enterprise at The Johns Hopkins University in Baltimore. Hanke taught economics at the Colorado School of Mines and at the University of California, Berkeley; served on President Reagan’s Council of Economic Advisers; as an adviser to five foreign heads of state and five foreign cabinet ministers. He was President of Toronto Trust Argentina in Buenos Aires, the world’s best-performing emerging market mutual fund in 1995. Hanke holds eight honorary doctorate degrees and is an honorary professor at four foreign institutions. In 1998, he was named one of the twenty-five most influential people in the world by World Trade Magazine. In 2020, Hanke was named a Knight of the Order of the Flag.




Papers Published in World Economics:


Monetary Facts and Inflation

Despite recent bouts of inflation in the United States, the United Kingdom, and Europe, central bankers have been attributing the rise in inflation to various non-monetary factors, such as supply chain problems and geopolitical events. However, this article argues that excess money supply is the real culprit behind inflation, echoing the famous quote by Milton Friedman, ‘Inflation is always and everywhere a monetary phenomenon.’ The study finds a high correlation between the rate of growth of the money supply and the rate of inflation, supporting Friedman’s assertion. The author presents updated data from 147 countries spanning the period from 1990 to 2021, reaffirming the tight linkage between changes in the money supply (M2) and inflation. This evidence contradicts claims by central bankers and supports the view that inflation is primarily a result of monetary factors rather than non-monetary ones.

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Hyperinflation in Suriname

Primary data reveal two new instances of hyperinflation, both occurring in Suriname in the 1990s. In June 1993 and October 1994, Suriname experienced monthly inflation rates of 208% and 58.6%, respectively. With these additions, the Hanke-Krus World Hyperinflation Table now records 66 hyperinflation episodes. These are the first recorded instances of hyperinflation in Suriname.

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Hyperinflation in the General Government: German-Occupied Poland During World War II

Newly discovered primary data reveals two previously undiscovered episodes of hyperinflation. They occurred in German-occupied Poland from late 1939 to early 1945. Nazi-occupied Poland, a territory then referred to as the General Government, experienced monthly inflation rates of 71.4% in January 1940 and 54.4% in August 1944. Inclusion of the 1940 and 1944 Polish cases of hyperinflation brings the total number of episodes of hyperinflation documented in the Hanke-Krus World Hyperinflation Table to 60. With these newly discovered cases, Poland has experienced more episodes of hyperinflation—four—than any other country in the world.

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On Measuring the Money Supply

Oskar Morgenstern warned in The Limits of Economics (1937), that the formulation of economic policy was handicapped by the lack of relevant data and errors in its measurement. In this paper, the measurement of the money supply is used to illustrate Morgenstern's point. The most relevant measure of money for purposes of nominal national income determination is an inclusive, broad money metric. Most central banks fail to report the most inclusive broad money metrics, and what is reported are measured with the use of simple-sum aggregates. Divisia monetary aggregates are superior to simple-sum aggregates. These superior measures are used and data are reported for the United States by William A. Barnett at the Center for Financial Stability in New York.

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On Measuring Hyperinflation

Venezuela now exhibits the 57th historic episode of hyperinflation as measured in the Hanke–Krus World Hyperinflation Table. Entry to the hyperinflation dataset depends on three qualifying criteria: inflation rates greater than 50% per month; the persistence of this rate for at least 30 consecutive days; and full documentation so that inflation estimates are replicable. This paper measures Venezuela’s hyperinflation by transforming changes in the US dollar–Venezuelan bolivar exchange rate into implied inflation rates using the purchasing power parity doctrine. The purchasing power parity method is accurate during periods of hyperinflation. Venezuela’s hyperinflation peaked with a monthly inflation rate of 219.7% on 30 November 2016.

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