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MONEY, CREDIT, and WAGES IN HYPERINFLATION: POST‐WORLD WAR I GERMANY
Author(s) -
BURDEKIN RICHARD C. K.,
BURKETT PAUL
Publication year - 1992
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1992.tb01976.x
Subject(s) - economics , hyperinflation , monetization , monetary economics , wage , monetary policy , money supply , inflation (cosmology) , boom , money creation , government debt , seigniorage , interest rate , macroeconomics , labour economics , central bank , physics , environmental engineering , theoretical physics , engineering
An important feature of the German hyperinflation is the way in which accelerating monetization of both government and private debt by the Reichsbank fueled the inflation process. The stimulus to private credit demand arising from more rapid adjustment of money wages over this period is often ignored, however. The present empirical results strongly support the importance of wage pressures in augmenting fiscal influences on nominal money growth during 1920–1923. Our findings also suggest that wage claims provided the main conduit through which higher inflationary expectations were accommodated by faster rates of monetary expansion.