In The News

In The News The German Hyperinflation The German experience between the two world wars remains one of history’s most vivid examples of hyperinflation and its horrific consequences. Loads of Money For these ten marks I sold my virtue,” were the words a...

THE FISHER EFFECT

THE FISHER EFFECT According to the principle of monetary neutrality, an increase in the rate of money growth raises the rate of inflation but does not affect any real variable. An important application of this principle concerns the effect of money on interest rates....

THE INFLATION TAX

THE INFLATION TAX If inflation is so easy to explain, why do countries experience hyperinflation? That is, why do the central banks of these countries choose to print so much money that its value is certain to fall rapidly over time? The answer is that the governments...

CASE STUDY

CASE STUDY MONEY AND PRICES DURING FOUR HYPERINFlATIONS Although earthquakes can wreak havoc on a society, they have the beneficial by-product of providing much useful data for seismologists. These data can shed light on alternative theories and, thereby, help society...

VELOCITY AND THE QUANTITY EQUATION

VELOCITY  AND THE QUANTITY EQUATION We can obtain another perspective on the quantity theory of money by considering the following question: How many times per year is the typical dollar bill used to pay for a newly produced good or service? The answer to this...