Carl-Ludwig Holtfrerich on The German Inflation 1914-1923

As with the Great Depression, there are many theories and stories—some of them contradictory—about what caused the German inflation. Did it depend on a combination of multiple factors? Was it overdetermined? What was the role of Germany's financial policy? At what point did hyperinflation become inevitable? What insights can we draw from the German experience during and after the First World War to help us better understand inflation and the price level in general?

In his 1986 book The German Inflation 1914–1923, German economist Carl-Ludwig Holtfrerich traces the roots of the inflation to Germany's fiscal and monetary policy during the First World War. This week, Holtfrerich joins us to discuss the book and his perspective on the German inflation (and hyperinflation).

Here are some questions we might explore:

1. What was the state of Germany's banking system after World War I?
2. What did Germany need to do to transition from a war economy to a civilian economy?
3. How could Germany have achieved the best outcome possible post-WWI?
4. Which happened first: price rises or money supply increases? Why does it matter?
5. Why did the Rentenmark succeed in ending the hyperinflation?