The Debt-Inflation Channel of the German (Hyper)Inflation

• 成果类型: Article
• 署名作者: Brunnermeier, Markus; Correia, Sergio; Luck, Stephan; Verner, Emil; Zimmermann, Tom
• 署名单位: Princeton University; Federal Reserve System - USA; Federal Reserve Bank - Richmond; Federal Reserve System - USA; Federal Reserve Bank - New York; Massachusetts Institute of Technology (MIT); University of Cologne
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20230685
• 发表日期: 2025
• 页码: 2111-2150
• 关键词: capital structure; monetary-policy; INVESTMENT; MARKET; constraints; EMPLOYMENT; illusion; banking; prices; CRISIS

摘要

This paper studies how a large increase in the price level is transmitted to the real economy through firm balance sheets. Using newly digitized macro-and micro-level data from the German inflation of 1919-1923, we show inflation led to a large reduction in real debt burdens and bankruptcies. Firms with higher nominal liabilities at the onset of inflation experienced a larger decline in interest expenses, a relative increase in their equity values, and higher employment during the inflation. The results are consistent with real effects of a debt-inflation channel that operates even when prices and wages are flexible. (JEL D22, E23, E31, G32, N14, N24)