Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/223187 
Year of Publication: 
2018
Series/Report no.: 
Working Papers of the Priority Programme 1859 "Experience and Expectation. Historical Foundations of Economic Behaviour" No. 6
Publisher: 
Humboldt University Berlin, Berlin
Abstract: 
A regime shift towards increased inflation expectations is credited with jumpstarting the recovery from the Great Depression in the United States. Germany experienced a recovery as fast and strong in the 1930s. What role did inflation expectations play at the start of this remarkable economic upturn? To answer this question, we study inflation expectations in Germany across two different methods: we conduct a narrative study of media sources and estimate inflation expectations from a FAVAR model. Consistently across these approaches, we do not find a shift to increased expected inflation. This recovery was different, and its causes lie elsewhere.
Subjects: 
Inflation Expectations
Great Depression
Inflation Forecasting
Regime Change
Germany
Narrative Evidence
JEL: 
E31
E32
E37
E12
N14
D84
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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