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Hyperinflation
What does not come back
Seven steps, about ten minutes, a question at each. You need no economics and no preparation, only a willingness to guess before you are told.
Step 1 of 7
This part takes as read how each of these three episodes ended. In every one of them the state stopped covering its spending with money its own central bank had made.
The question
The last part was how each of these three stopped, and this part is the years afterwards, mostly in Germany and in Zimbabwe.
An ending takes weeks, and Thomas Sargent has German prices, the government's borrowing from its central bank and the public finances all turning at once in the winter of 1923. Prices had been moving on a belief about what the state would need next.
So these seven steps ask what a country is still carrying years later, and whether money being made today is on the same road. The last step is the test.
What this module covers
Written for every level. Tap any underlined word for what it means, and open the boxes below for the economics behind each decision. If you already know the theory, skip both and the history reads straight through.
German prices stopped rising in late November 1923, and the mark stopped losing value in the same weeks. That stop is the prices, and not whether anybody would hold the mark again.
Thomas Sargent has three things happening at once and abruptly: the government's further borrowing from its stopped, the public finances came into balance, and the inflation stopped. It took, he writes, a change of rule binding enough to be believed.
Sargent calls the change of currency unit on its own only a cosmetic measure, and puts the substance in the stop on the borrowing. He read Germany, Austria, Hungary and Poland, and the graphs, he writes, show inflation stopping abruptly rather than gradually in each case.
So the speed of the German ending comes from what was moving the prices in 1923. A harvest cannot change in a week and a belief about what a state will need next month can.
Take a guess. You are not expected to know the answers, and being wrong is what makes a number stick.
German prices stopped in late November 1923. What do Sargent's figures show German output and employment doing after that?
Zimbabwe has had three currencies of its own since 2009, and the newest fell by more than two fifths in a day, less than six months in.
Bond notes came first, in November 2016, in twos and fives pegged one to one with the American dollar. In February 2019 they and the bank balances people held were renamed RTGS dollars and let out to trade.
The third was the ZiG, short for Zimbabwe Gold, from 5 April 2024 at 13.55 to the American dollar. Behind it, the Reserve Bank said, stood 100 million American dollars in cash and gold worth 185 million more.
Bolivia's own stabilisation left something behind too. Its financial system, Brookings wrote in 1990, never returned, in the paper's phrase, to a local currency habitat.
The money the Reserve Bank had made, meaning cash and the balances banks keep with it, was up by around 215 per cent by that September. The sets the Bank's advances to government beside that.
It lost nearly 43 per cent of its value in a day on 27 September 2024, and month-on-month inflation passed thirty per cent that October.
The ZiG opened in April 2024 with gold and dollars behind it. What does the Fund set beside the 215 per cent rise in the money the Reserve Bank had made by that September?
On 27 November 2025 Zimbabwe's finance minister told parliament that annual had been 32.7 per cent in October.
Five bodies have published on that currency in the past year and a reader cannot line them up. Two set a month against the same month a year earlier, and the rest give a year.
The African Development Bank gives 89 per cent for 2025 against 736 per cent for 2024, and labels its table row inflation and nothing more. The Fund's annual average row gives 89.0 per cent for the same year, and the row beneath it reads 30.7 per cent.
The World Bank has the annual ZiG inflation rate at 4.1 per cent in January 2026, and the Reserve Bank reported single digits for the same month. That is where they stood in April 2026.
So what turned it was the arrangement rather than the currency. The Fund records the Reserve Bank stopping the advances at the end of September 2024, and monthly ZiG inflation at 0.3 per cent by June 2025. Settling prices on the third currency since 2009 is not people agreeing to hold it.
Zimbabwe's finance minister gave 32.7 per cent and the African Development Bank gave 89 per cent, and both figures are for 2025. What separates them?
That was module 7 of 7, the last in Hyperinflation
Your score will appear here.
[1] How abruptly the price level stopped, and what happened to German output and employment afterwards: National Bureau of Economic Research, in Robert E. Hall (ed.), Inflation: Causes and Effects, University of Chicago Press, 1982: The Ends of Four Big Inflations, by Thomas J. Sargent.
[2] What one country's banking system did in the years after its own stabilisation: Brookings Institution, Brookings Papers on Economic Activity 2:1990: Extreme Inflation: Dynamics and Stabilization, by Rudiger Dornbusch and others.
[3] When Zimbabwe gave up its own dollar, and what its newest currency did after it arrived: International Monetary Fund, Zimbabwe: 2025 Article IV Consultation, Country Report 25/282, October 2025; and Zimbabwe: Challenges and Policy Options after Hyperinflation, Departmental Paper 10/3, 2010.
[4] What the newest currency is called, the exchange rate it opened at, and the bank's own annual inflation figures: African Development Bank, Zimbabwe Country Focus Report 2026.
[5] What the newest currency's annual inflation rate has been most recently: World Bank, Zimbabwe Macro Poverty Outlook, April 2026.
[6] The figure Zimbabwe's own finance ministry gave parliament: Zimbabwe Ministry of Finance, The 2026 National Budget Speech, 27 November 2025.
[7] What Zimbabwe's central bank issued each time, and what it said stood behind the newest one: Reserve Bank of Zimbabwe, Press Statement on the Introduction of Bond Notes, 26 November 2016; Monetary Policy Statement, 20 February 2019; Questions and Answers on the Structured Currency, April 2024; and a press statement of 3 February 2026.
[8] What German prices did in 1932, and what the agency's authors say about the road from 1923: Bundeszentrale für politische Bildung, APuZ: Die Hyperinflation 1923 im kollektiven Gedächtnis, by Lukas Haffert, 2 January 2023; and 1923 als Schlüsseljahr für 1933?, by Volker Ullrich, 20 January 2023.
[9] How often the German parliament has mentioned it, and what a central bank makes when it buys a bond: European Central Bank, blog: Hyperinflation: trauma and its reconstruction, by David Barkhausen, 20 June 2025; and Money and inflation, the Thünen Lecture by Isabel Schnabel, 25 September 2023.
[10] The one measurement that separates the two cases: Centre for Economic Policy Research, VoxEU: Lessons from money growth and inflation in the US since 2008 and the post-WWI German hyperinflation, by Alex Cukierman, 30 March 2016.
[11] Where a central bank draws the line, and why new reserves do not become new lending: Bank of England, Monetary policy and the Bank of England's balance sheet, by Gertjan Vlieghe, 23 April 2020; and Money creation in the modern economy, Quarterly Bulletin 2014 Q1, by Michael McLeay, Amar Radia and Ryland Thomas.
[12] What the American central bank says it is and is not doing when it buys government debt: Federal Reserve System, Board of Governors, frequently asked questions, 25 August 2016.
Country data from the World Bank (CC BY 4.0) and the UNDP Human Development Report (CC BY 3.0 IGO)
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