Inflation Expectations and the Recovery from the Great Depression in Germany
- Daniel, Volker (University of Halle)
- ter Steege, Lucas (University of Bonn)
Deutsche Forschungsgemeinschaft (Germany)
- Award Number: 1859
AbstractA regime shift toward increased inflation expectations is credited with jump-starting the recovery from the Great Depression in the United States. What role did inflation expectations play in Germany that experienced a similarly successful economic upturn in the 1930s? We study inflation expectations in the German recovery across several methods: we conduct a narrative study of media sources; we estimate inflation expectations from a factor-augmented vector autoregression model, real interest rate forecasts, and quantitative news series. Consistently across these approaches, we do not find a shift to increased expected inflation. This recovery was different, and its causes lie elsewhere.
1925-01-01 / 1935-09-30Time Period: Thu Jan 01 00:00:00 EST 1925--Mon Sep 30 00:00:00 EST 1935
Update Metadata: 2019-09-08 | Issue Number: 2 | Registration Date: 2019-08-31