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Beginning of Paper
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The Great Inflation
In late-1922 the German government were forced to ask the Allies for a
moratorium on reparations payments; this was refused, and she then
defaulted on shipments of both coal and timber to France. By January of
the following year, French and Belgian troops had entered and occupied the
Ruhr. The German people, perhaps ....
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Middle of Paper
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.... the Nazi vote.
Economists will argue that runaway hyperinflation has two sources. Firstly,
it arises through a fall in the foreign exchange value of a currency, when
an adverse balance of payments reduces foreign investors demand for the
currency. A falling exchange rate increases the cost of imports and,
therefore, the cost of living. Wages rise as workers try to maintain their
standard of living, especially if previous institutional arrangements have
linked wages to living costs. Firms paying higher wages raise the price of
the goods they sell, prices rise still further, th ....
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SUBJECTS
