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<p>The German hyperinflation in 1923 was caused by monetary financing of the highly deficient German state budget by a dependent central bank. The social and economic consequences of the hyperinflation were disastrous. Combined with an instable political atmosphere, paving the way for the rise of the Nazis, the hyperinflation is deeply etched in the German collective memory. It is this collective memory that shapes the current institutional framework of the ECB. While risk aversion and institutional imprint of the ECB’S policy makers differ, the ECB’s institutional framework ensures that current inflation will not evolve into a hyperinflation.</p>
</abstract>

The German hyperinflation in 1923 was caused by monetary financing of the highly deficient German state budget by a dependent central bank. The social and economic consequences of the hyperinflation were disastrous. Combined with an instable political atmosphere, paving the way for the rise of the Nazis, the hyperinflation is deeply etched in the German collective memory. It is this collective memory that shapes the current institutional framework of the ECB. While risk aversion and institutional imprint of the ECB’S policy makers differ, the ECB’s institutional framework ensures that current inflation will not evolve into a hyperinflation.

Hyperinflation, Collective Memory, and Central Bank Independence

Wirtschaftsdienst

This work is licensed under the Creative Commons Attribution 4.0 International License.

Hyperinflation, kollektives Gedächtnis und Zentralbankunabhängigkeit

The German hyperinflation in 1923 was caused by monetary financing of the highly deficient German state budget by a dependent central bank. The social and...

Hyperinflation, Collective Memory, and Central Bank Independence

Published Online: Mar 01, 2023

Page range: 94 - 97

DOI: https://doi.org/10.2478/wd-2023-0029

© 2023 Ulrike Neyer et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.