Weimar Hyperinflation

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Following the German surrender in November 1918, the Empire experienced a brief, but significant civil revolution. The German Revolution lasted from the end of the war until August 1919. During that time, a national assembly was held in the city of Weimar where a new constitution was drafted. A new federal republic (known as the Weimar Republic) was born and a semi-presidential representative democracy overthrew the monarchy of Kaiser Wilhelm II. The new government faced immediately faced a multitude of issues including political instability, reestablishing and maintaining international post-war relations, and severe economic turmoil – most notably the period of hyperinflation which occurred in the early 1920s.

Hyperinflation is an economic condition characterized by “a rapid increase in the overall price level that continues over a significant period” and in this period the concept of inflation is essentially rendered meaningless (Kroon 90). The post-World War I German economy experienced a crippling period of hyperinflation which lasted nearly two years and had an enormous impact on the economy. The hyperinflation began inconspicuously as the inflation rate crept just a percent or two per year during the war years. In the post-war period inflation began to rise and in early- to mid-1922, inflation raged. During this period, businesses reached full operational capacity and unemployment nearly disappeared. While nominal wages increased, real wages dropped precipitously. Workers were paid two or three times a day, and they rushed home to pass the money to family members who could go and exchange the rapidly depreciating currency for real goods (clothing, food, etc.) before it became completely worthless. Prices rose so rapidly pe...

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...ce of many Germans to the Weimar Republic – perhaps even paving the way for Adolf Hitler and the Nazi Party’s rise to power in the 1930s.

Works Cited

Fergusson, Adam. When Money Dies: The Nightmare of the Weimar Collapse. London: William Kimber, 1975. Print.

Gavin, Philip. “End of Hostilities and Rise of Hitler.” Real Clear History. n.p. 12 Nov. 2013. Web. 14 Nov. 13.

Hubbard, R. Glenn, and Anthony Patrick O’Brien. Macroeconomics. 4th ed. Boston: Pearson, 2013. Print.

Kosares, Michael J. The Nightmare German Inflation. Scientific Market Analysis. 1970. Print.

Kroon, George E. Macroeconomics The Easy Way. New York: Barron’s Educational Series, Inc., 2007. Print.
Rapten, Pema Dechen. “Stresemann Era, 1923-29.” Mount Holyoke College. n.d. Web. 1 Nov. 2013.
Trueman, Chris. “Hyperinflation and Weimar Germany.” History Learning Site. n.p. 2013. Web. 17 Nov. 2013.

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