2 ms·
I though the Weimar Republic's hyperinflation wasn't simply because the country printed her own currency; the more specific problem was that they then used that
by lasagnaphil 6y ago
I though the Weimar Republic's hyperinflation wasn't simply because the country printed her own currency; the more specific problem was that they then used that printed currency to pay back war reparations from other countries. Because the money is only going out of the nation's borders and isn't used to grow its own economy, the currency of the nation is devalued and international exchange rates fall, leading to a catastrophic amount of inflation.
One thing I heard Stephanie Kelton and other MMTers has always emphasized about MMT is that the main question of the theory isn't "Should we print the money?", but "HOW should we use the printed money?" The money-printing is already conceptually independent from yearly budgets; the big question is how we're going to use that money so that uncontrollable inflation does not occur (which the Keynesians failed to answer with stagflation). If the newly printed money improves the strength of the "actually existing" national economy, then its currency will become competitive with others and a hyperinflation moment like Weimar would probably not happen.