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They have a unified cause: a destroyed economy. Unemployment is high because there is nothing to do; prices go up because there is nothing to buy. That inflati
by jfengel 1y ago
They have a unified cause: a destroyed economy. Unemployment is high because there is nothing to do; prices go up because there is nothing to buy.
That inflation becomes hyperinflation when the government tries to break that cycle by pumping money into the economy. Done properly, that's just the same "quantitative easing" that we had in the 2010s. "Properly" means that you end it just as it takes effect.
But if it doesn't have that effect, it becomes a self-reinforcing cycle. It's not the cause of the economic breakdown, but it is an easy way to quantify it.
Hyperinflation usually comes after a war, or sometimes after a government collapse. Something that completely stops all productivity in the country. Germany had a massive reparations bill, so what little work was getting done mostly got shipped out of the country.