The Rise and Fall of the Pyramid Schemes in Albania

July 1, 1999

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Christopher J. Jarvis The Rise and Fall of the Pyramid Schemes in Albania, (USA: International Monetary Fund, 1999) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

What lessons can be drawn from the unprecedented growth and spectacular collapse of financial pyramid schemes in Albania? This paper discusses the origins of the pyramid schemes and the way the authorities handled them. It also analyzes the economic effects of the pyramid schemes, concluding that despite the descent into anarchy triggered by the schemes’ collapse their direct effects on the economy are difficult to specify and appear to have been limited. Finally, the paper argues that prevention of pyramid schemes is better than cure, and that governments and international financial institutions should be vigilant in clamping down on frauds.

Subject: Bank deposits, Banking, Commercial banks, Credit, Currencies, Exchange rates, Financial institutions, Foreign exchange, Inflation, Money, Prices

Keywords: A number of company, Banking system, Borrowing company, Commercial banks, Credit, Credit market, Currencies, Democratic Party government, Europe, Exchange rates, Government statement, Inflation, Ponzi scheme, Ponzi schemes, Pyramid scheme company, Pyramid scheme phenomenon, Pyramid schemes, Trading profits, WP

Publication Details

Pages:

36
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 1999/098
Stock No:

WPIEA0981999
ISBN:

9781451852127
ISSN:

1018-5941

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