Friday, May 27, 2011

Four Hyperinflations

From Sargent's "The Ends of Four Big Inflations" (1982), Corrections presents the hyperinflationary episodes of Germany, Poland, Hungary, and Austria (click to enlarge).  All price indices were normalized to one in the beginning period.  More easily readable in the enlarged version, the vertical scales of each graph, clockwise from top left, are: 10^4, 10^13, 10^5 and , 10^4.


  1. There is a really interesting book "The Wages of Destruction: The Making and Breaking of the Nazi Economy" that discusses the role of the post-WWI economy in Germany and its role in politics. Discusses the consequences of hyperinflation.

  2. Indeed, I'd be interested, especially in light of the at-times-very-weak evidence on the impact of high inflation:

  3. To be more clear, I'm always interested in reasons why inflation matters, because it seems very difficult to build a case that it matters very much. Seigniorage is tiny even when inflation is high. Menu costs are a joke. Taylor contracts are unconvincing and people adapt to inflation.

    The biggest economic effect of inflation would seem to be a negative impact on Chinese government assets. (One percent increase from inflation expected when they bought the asset would cost them something on the order of ten billion dollars).