Inflation expectations and the recovery from the Great Depression in Germany

Abstract

Data appendix to: Volker Daniel/Lucas ter Steege: Inflation expectations and the recovery from the Great Depression in Germany, in: Explorations in Economic History 75 (2020), https://doi.org/10.1016/j.eeh.2019.101305. A regime shift toward increased inflation expectations is credited with jump-starting the recovery from the Great Depression in the United States. What role did inflation expectations play in Germany that experienced a similarly successful economic upturn in the 1930s? We study inflation expectations in the German recovery across several methods: we conduct a narrative study of media sources; we estimate inflation expectations from a factor-augmented vector autoregression model, real interest rate forecasts, and quantitative news series. Consistently across these approaches, we do not find a shift to increased expected inflation. This recovery was different, and its causes lie elsewhere