Die Selbststabilisierung von Hyperinflationen: Eine überraschende monetäre Arithmetik

Self-Stabilization of Hyperinflation — Surprising Monetary Arithmetics This paper discusses the interrelations between budget deficits, money supply growth and rates of inflation in periods of hyperinflation. The traditional approach is generalized and analyzed in respect of its explanatory value for high rates of inflation, the interrelations between budget deficits and rates of inflation as well as stabilization properties. It turns out that monetary models are unable to explain the emergence of unlimited inflationary processes when governmental budget deficits are monetized by the central bank. Moreover, monetary arithmetics do not permit any monotonous link between levels of inflation in balanced inflationary situations and the level of the real budget deficit. When the budget deficit grows in the course of the inflationary process, this leads to a curbing of inflation. Stabilizing the level of prices in periods of hyperinflation presupposes a non-recurring drastic increase in nominal money supply on the one hand and the binding of governmental authorities to a complete waiver of monetization in future on the other. When, after stabilization, budget deficits are financed again, the outcome is deflation