Como deter a hiperinflação: lições da experiência inflacionária alemã da década de 20

Abstract

The German hyperinflation is the laboratory case of monetary economics: deficit finance leading to money growth and explosive inflation. This paper investigates once more the facts and the literature on the topic. Three points are highlighted: Sargent's emphasis on unambiguous budget stabilization is questioned, the role of the exchange ante is placed as central in the inflation mechanism and the persistent extraordinarily fight real interest rates, following stabilization are interpreted as perhaps central to the success. The paper notes that much of the budget stabilization was due not to drastic expenditure cuts or increases in tax rates but rather to the end of inflation which brought with it a sharp increase in the real value of tax collection from the existing fiscal structure. Exchange rate fixing us part of the stabilization is emphasized as a form of incomes policy that helps the economy coordinate expectations and hence promotes a snore rapid acrd stable disinflation. The sharp increase in real interest rates is shorn to stem fro m the destruction of liquidity during the It hyperinflation which could not he reversed sufficiently fast so that high nominal interest rates in combination -with stable prices meant high real rates.