Another data point for pegged interest rates leading to the hyperinflation solution from Brad DeLong. I didn't know that Weimar Germany had pegged interest rates.
Monday, October 12, 2015
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Also, try to avoid the use of dollar signs as they interfere with my setup of mathjax. I left it set up that way because I think this is funny for an economics blog. You can use € or £ instead.
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Mark Sadowski posted in the comments (somewhere) a table showing this one time. If I recall correctly after hyperinflation was well underway, there was a comical partial raising of the rates for a brief period: comical because it was relatively so small compared to how far out of control inflation was at that point. It's not apparent in your plot here, so perhaps that was a very brief transition period before raising rates more substantially.
ReplyDeleteHi Tom,
DeleteI think it depends on the particular rate. This is an 'official rate', but some other rate might be relevant.
Here's Mark's table:
Deletehttp://noahpinionblog.blogspot.com/2014/04/the-neo-fisherite-rebellion.html?showComment=1398472777773#c1954688344009492559
I love how they raised the rate 0.1% (all the way up to 5.1%) once YoY inflation had reached 603.5%