tutor2u | Hyperinflation in Germany in 1923

Study Notes

Hyperinflation in Germany in 1923

Level:
GCSE
Board:
AQA, Edexcel, OCR

Last updated 19 Jan 2019

Hyperinflation, or a rapid increase in prices, was a major problem for the Weimar Republic, particularly as it struggled with the problems caused by the occupation of the Ruhr by France.

The occupation of the Ruhr lead to significant shortages for goods and food, and as these were rationed prices rose. A general rise in prices is referred to as inflation. As a result of this, it meant that people had to spend more of their pay packets on essentials.

The Weimar Republic was struggling with reparations payments and was receiving far less money from taxes than it had initially done (due to the rise in unemployment.) If people are unemployed it means that they are not earning and therefore not paying taxes. In order to resolve the problem, the government decided that printing the money it needed was the best solution.

The printing of money created further problems for the government. As more money was printed, it meant prices rose even quicker. This situation of rapidly increasing prices is known as hyperinflation.

For example, the price of bread increased from 1 mark per loaf in 1919 to 200,000 billion marks in 1923

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