Weimar hyperinflation ended quickly and was succeeded by austerity-triggered collapse.

Evidence

Moreover, while the hyperinflations are seen these days as an uncontrollable phenomenon, this one at least was not only deliberately provoked, it ended rather quickly with the introduction of the rentenmark, which was tied to, of all things, real estate assets. The new stable reichsmark succeeded it within a year. The next four years saw the German economy perform rather well, so long as US capital flows kept flowing. When those flows turned off in 1929, the German government abandoned the countercyclical policies it had pioneered in the 1920s, especially when its unemployment insurance scheme generated a large deficit, and reached for the austerity levers. The Reichsbank raised interest rates to encourage capital inflows, but the flows failed to arrive given the general shortage of liquidity in Europe following the Fed’s interest rate hike. The only thing that happened was that the economy tanked further. Official reserves fell precipitously, and so did the gold cover. — Mark Blyth, Austerity, 527

Categorization

• XREF: The 1929 austerity turn in Germany is a direct historical precedent to the book’s central argument about austerity’s failure; connects to Mattei. — connects to: Weimar’s compromise order collapsed once economic crisis intervened — Rolf Wiggershaus, The Frankfurt School: Its History,…, 928; Weimar’s hybrid socialist-capitalist system collapsed when economic crisis struck — Rolf Wiggershaus, The Frankfurt School: Its History,…, 928; Austerity in Weimar Germany crippled labor and enabled Nazi takeover — Clara E. Mattei, Escape from Capitalism, 234 (+3 more)
• SHARE: The rentenmark was tied to real estate assets — a detail for anyone interested in currency design and asset-backing debates.
• QUESTION: The claim that Germany ‘pioneered countercyclical policies in the 1920s’ before the US — worth chasing the specific measures.

Broader Connections

• Fed rate hikes in 1928 reversed capital flows and triggered austerity in Germany. #expands (0.85) — Mark Blyth, Austerity, 502
• Austerity in Weimar Germany crippled labor and enabled Nazi takeover #expands (0.80) — Clara E. Mattei, Escape from Capitalism, 234
• German hyperinflation was unrelated to the later austerity that enabled fascism #contradicts (0.75) — Mark Blyth, Austerity, 556
• 1920s German hyperinflation stemmed from WWI debt financing, not stimulus #corroborates (0.75) — Mark Blyth, Austerity, 162