POL SCI 5 Lecture Notes - Lecture 9: Hyperinflation In The Weimar Republic, Procyclical And Countercyclical, French Franc
22 Apr 2016
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Because the international economic system was made unstable due to the inability of british n unwillingness of us to b responsible for stabilizing: Maintaining a relatively open market for distress goods. If world economy was symmetrically, there would not b depression. Ex. price of wheat declines = produce losses 4 farmers gains in real purchasing power for consumer. Ex. (1943) us cuted down on imports n lending @ the = time. Another form of financing: maintaining a market for distress goods. Adapt domestic resources to changes in productive capacities abroad. Maintain the import market open in periods of stress. World economic conference (1927) - nations adopted a tariff truce. Enlarged protection from agricultural to manufactured products. Lack of leadership + anti-cycling lending + open market for goods = unstable system. Heritageof the war (reparations + war debts + overvaluation of the pound & undervaluation of the french franc), german inflation (1923)
