ابرتورم, نرخ ارز و پول درون زا:بازبینی آلمان بعد از جنگ جهانی اول

We re-examine the interaction of domestic and external factors in the German hyperinflation by extending Frenkel's monetary model of the exchange rate to incorporate: (1) endogeneity of the money supply with respect to government debt, expected inflation and money wages; (2) the direct impact of exchange rate depreciation on the domestic price level; and (3) endogenous wage determination. Four-equation estimates support each extension of the monetary model. It appears that government deficit finance, the collapse of the exchange rate and the monetary transmission of the wage-price spiral were all crucial contributors to the price explosion.