monetary overhang

Monetary overhang is a phenomenon in which people have more money holdings than they would normally choose to because of a lack of ability to spend it. In an economy where there is monetary overhang to due to shortages, if price controls are removed, the overhang tends to produce a burst of open inflation,{{cite encyclopedia|editor-last1= Black|editor-first1=Miles|editor-last2=Hashimzade|editor-first2=Nigar|editor-last3=Myles|editor-first3=Gareth|encyclopedia=A Dictionary of Economics|title=money overhang|url=https://www.oxfordreference.com/display/10.1093/oi/authority.20110803100205464|edition=3rd |year= 2009|publisher=Oxford University Press|location=Oxford Reference website |isbn=9780199237043|doi=10.1093/acref/9780199237043.001.0001}} or too much money chasing too few goods, thus raising prices. Monetary overhang can also be caused by excess credit.{{cite web|url=https://www.noemamag.com/how-china-avoided-soviet-style-collapse/|title=How China Avoided Soviet-Style Collapse|author-last1=Tooze|author-first1=Adam|date=September 16, 2021|website=Noema|publisher=Bergruen Institute|location=Los Angeles}}

This is a phenomenon often present with repressed inflation and financial repression, and was common in centrally planned economies like the Soviet Union. The Soviet Union experienced monetary overhang from the mid-1980s onwards. This was reported by the IMF in 1991.{{cite web|ssrn=884851|title=IMF Working Paper No. 91/55: Forced Savings and Repressed Inflation in the Soviet Union: Some Empirical Results|last=Cottareli|first=Carlo|date=June 1991|publisher=International Monetary Fund|language=English|url=https://www.imf.org/en/Publications/WP/Issues/2016/12/30/Forced-Savings-and-Repressed-Inflation-in-the-Soviet-Union-Some-Empirical-Results-933}} Subsequent to this report, the USSR collapsed.