The study of infl ation is always also a study of the ways in which infl ation was understood. In the most dramatic cases of infl ation that were not simply an immediate product of expensive military confl ict producing an impetus for governments to devalue the currency, the infl ationary process was propelled by intellectual arguments about why infl ation (although it might produce some bad social consequences) was generally benefi cial. This was the case in the world's most famous hyper-infl

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... tion experience (though not quite the world's most extreme, which was post-World War II Hungary): Germany of the Weimar Republic. Representatives of the government explained that the infl ation arose out of the circumstances of fi nancing reparations payments and a trade defi cit (rather than from the monetization of government debt) (Holtfrerich 1986). There were also many people who saw infl ation as an interplay of organized interests, in which labor and employer organizations bid each other up (Feldman 1993). Infl ation was thus simply a way of buying social peace in a politically precarious environment.