Germany’s hyperinflation resulted from a confluence of several factors, all of which contributed to a temporary breakdown in state capacity and to unsustainable public sector deficits. Wartime debt deflated by 90% already in 1920. Informal wage indexation and failure to enforce collection of a...

Main description: Warum brach über Deutschland nach der vielversprechenden Stabilisierung der Mark 1923/24 und dem anschließenden Aufschwung eine Krise von ungekanntem Ausmaß herein? Welche Faktoren verbanden sich zu dieser Katastrophe? Wäre sie zu verhindern gewesen? Hätte die...

This paper examines the role of currency and banking in the German financial crisis of 1931 for both Germany and the U.S. We specify a structural dynamic factor model to identify financial and monetary factors separately for each of the two economies. We find that monetary transmission through...