Real Output Loss in the Austrian and German Hyperinflations of the 1920s

Real GDP data reveals some interesting differences in the Austrian and German hyperinflations of the 1920s.

I will examine them below.

I. Austria
The real GDP figures are below with data extending to the Great Depression as well:

Real GDP in Austria, 1919–1938
* in millions of international Geary-Khamis dollars
1919 | 14 503
1920 | 15 571 | 7.36%
1921 | 17 236 | 10.69%
1922 | 18 784 | 8.98%
1923 | 18 597 | -0.99%
1924 | 20 754 | 11.59%
1925 | 22 161 | 6.77%
1926 | 22 536 | 1.69%
1927 | 23 216 | 3.01%
1928 | 24 295 | 4.64%
1929 | 24 647 | 1.44%
1930 | 23 967 | -2.75%
1931 | 22 044 | -8.02%
1932 | 19 769 | -10.32%
1933 | 19 113 | -3.31%
1934 | 19 277 | 0.85%
1935 | 19 652 | 1.94%
1936 | 20 238 | 2.98%
1937 | 21 317 | 5.33%
1938 | 24 037 | 12.75%
(Maddison 2003: 50).

Austrian’s hyperinflation lasted from October 1921 to September 1922. Curiously, the annual figures show no real output decline in either 1921 or 1922, but there was a real GDP loss of 0.99% in 1923. I assume that this was in some way the consequence of the hyperinflation.

By contrast, in Austria’s deflationary depression from 1929 to 1933, real output fell by 22.45%. The output loss under the hyperinflation looks very mild by comparison.

II. Germany
Again, real GDP data is below with data extending to the Great Depression:

Real GDP in Germany, 1919-1938
* in millions of international Geary-Khamis dollars
1919 | 156 591
1920 | 170 235 | 8.71%
1921 | 189 511 | 11.32%
1922 | 206 188 | 8.80%
1923 | 171 318 | -16.91%
1924 | 200 557 | 17.06%
1925 | 223 082 | 11.23%
1926 | 229 363 | 2.81%
1927 | 252 321 | 10.00%
1928 | 263 367 | 4.37%
1929 | 262 284 | -0.41%
1930 | 258 602 | -1.40%
1931 | 238 893 | -7.62%
1932 | 220 916 | -7.52%
1933 | 234 778 | 6.27%
1934 | 256 220 | 9.13%
1935 | 275 496 | 7.52%
1936 | 299 753 | 8.80%
1937 | 317 783 | 6.01%
1938 | 342 351 | 7.73%
(Maddison 2003: 50).

Germany’s hyperinflation lasted from August 1922 to November 1923.

Germany’s real output loss was 16.91% in 1923, a very severe loss, and in one year. Curiously, the real output loss from 1929 to 1932 was 16.11%, slightly lower, but extended over four years of depression.

Why was there such a gulf between Germany and Austria in terms of real output loss during their hyperinflations?

Possibly, the reason was that the Austrian inflation rates were lower. However, with an inflation rate of 1426% in 1922 in Austria, it still seems surprising that the GDP fall was only 0.99%.


BIBLIOGRAPHY

Maddison, Angus. 2003. The World Economy: Historical Statistics. OECD Publishing, Paris.