Economic stagnation in Weimar Germany: A structuralist perspective

T.H. Block

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Mexico and argentina in the 1990s as well as weimar germany in the 1920s implemented similar exchange-rate-based stabilization programs which were successful in stopping inflation, but failed to generate the domestic savings and investment rates necessary for a sustainable growth path. It is argued that in both cases substantial foreign capital inflows were attracted by a stable nominal exchange rate and high interest rates, which alleviated the distributional struggle driving high inflation. However, this incentive structure caused a profit squeeze in the tradable goods sector due to an appreciating real exchange rate precipitating the ultimate collapse of the programs.
Original languageEnglish
Pages (from-to)127-150
JournalStructural Change and Economic Dynamics
Publication statusPublished - 1 Jan 2002

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