Interest Rate Inertia

The example of Germany

Deep in the German soul is the memory of the hyperinflation after World War I

https://imgur.com/gallery/iJ5tE

In Germany this was caused by the printing of too much paper money fueled by the draconian conditions imposed on Germany by France and England via the Versailles Treaty. But there was a lag of a few years. The lag is caused by inertia. When peopl…