Causes of German Inflation 1918-33Causes of Inflation in Germany between 1918-33


Immediate causes of inflation were:
1. Reparations- The Germans owed very large amounts of money to France. The Germans took to much time to pay the reparations so Belgium and French troops annexed the province of Ruhr. Ruhr was the industrial heartland of Germany and the annexation of Ruhr helped lead Germany to hyper-inflation.
2. Passive Resistance- The people of Ruhr went on strike and refused to work for France and Belgium. This only hurt Germany.
3. Reichsbank- "by autumn 1923, it cost more to print a bank note than a bank note was worth and the Reichsbank was forced to use newspaper presses to produce sufficient money." (1)
4. No exports- German loss of Ruhr land lost coal industry and lost almost all exports
5. Printing money- excess printing of money down spiraled the value of the German mark.


Medium term causes of inflation were:
1. No tax increase-
2. Cut government spending
3. Balance the Budget-
a policy of of deficit financing.
4. Reduce the real value of the national debt
5. Social Welfare Programs

6. Deficit Spending

Long term causes of inflation were:
1. War Bonds- Instead of increasing taxation during the first World War, the Kaiser instead sold war bonds assuming that the government would be able to pay them back after then end of the war. When Germany lost, they were unable to pay back the war bonds sold during the war and the new reparation payments now owed to the Allied countries.
2. Post war unemployment- When the first World War ended, the amount of work went down due to the lack of need of weapons that were previously needed during the war. As well as certain industries which had been prospering during the war going down in production and by connection slowly cutting down workers and pay, the soldiers who had been fighting in the war had come back to the homeland of Germany to find that there were not any jobs for them. This caused higher unemployment not only due to the decrease in industry but the increase in the amount of people who could work.
3. WW1
4. Cost of War
5. No plan over a few months of war (Germany thought this would be a quick war)
6. Debt


Work cited:

Weimar and the Rise of Nazi Germany, Layton, Geoff. (1)