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Inflating away the debt: The debt-inflation channel of German hyperinflation
The recent rise in price pressures around the world has reignited interest in understanding how inflation transmits to the real economy. This column exploits a newly digitised firm-level database to offer new insights from one of the key events in monetary history: the Great German Inflation of 1919-23. The findings provide empirical evidence supporting the relevance of the debt-inflation channel in the transmission of unexpected inflation to the real economy. […]