hyperinflation
1. When the German government succeeded in putting an end to the hyperinflation in 1924, would this have been better news for borrowers or for lenders? Briefly explain.
2. In 1919, the British economist John Maynard Keynes wrote the well-known book The Economic Consequences of the Peace, in which he argued that the reparations for World War I that Germany was being forced to pay to the United States, France, Italy, and the United Kingdom would have devastating consequences: “But who can say how much is endurable, or in what direction men will seek at last to escape from their misfortunes?” What is the connection between the war reparations that Germany was forced to pay and the later hyperinflation? Why might a hyperinflation lead to political unrest?
hyperinflation