Working Paper: NBER ID: w0728
Authors: Peter M. Garber
Abstract: This paper provides a detailed discussion of the real phenomena that materialized in the stabilization period which followed the German hyper-inflation. Significant real dislocations arose after the monetary reform; and these can be attributed to a government policy which subsidized heavy industry through the inflation tax proceeds. The "credibility problem" appears not to have been a significant factor in the post-reform dislocation.
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JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Government policies that subsidized heavy industry through inflation tax proceeds (E64) | Significant real dislocations after the monetary reform (E49) |
| Subsidies during inflation (E31) | Transitional costs once these subsidies are removed (H23) |
| End of subsidies (H29) | Reallocation of resources among industries (L16) |
| Inflation and government-imposed distortions (E31) | Transitional costs (J32) |
| Transition from inflation to price stability (E31) | Significant transitional costs (J32) |