Hyperinflation 1922/1923

Abstract

Inflation has an extensive notation within the History of Economic thought. Going back even to the Medieval Ages and the Scholasticism some aspects of inflation were a matter of concern. St. Thomas Aquinas, the most important of the scholastic writers, attempted to reconcile the religious teachings of the Catholic Church with the slowly increasing economic activity of the time.

In his time the medieval Catholic Church was concerned that increasing economic activities would turn the minds and hearts of humans from religious and ethical affairs and toward materialism (Landreth & Colander 2002, 37). St. Thomas Aquinas and other scholastics were less interested in analysing the formation of prices in an economy including the role that prices play in the allocation of scarce resources, but more focused on the ethical aspects of prices, that is discussing issues of equity and justice. The basic question was whether religious doctrine forbade merchants to sell goods for more than they paid or for trades people to charge more for their services than their labour costs - in other words the religious and moral area under discussion was whether taking profits and interest were sinful acts? "Thus, the scholastic concept of just price is seen alternatively as a forerunner of the Ricardian-Marxian labour theory of value...and the notion implicit in classical-neoclassical theory that competitive markets yield ideal just prices" (Landreth & Colander 2002, 38).