Hyperinflation as a catalyst of transformations: Path dependence through accelerated dynamics in post-First World War Austria

Hyperinflations are a modern phenomenon often associated with periods of transition. By accelerating the dynamics that govern the financial, political and private spheres of life, hyperinflations necessitate a quickened decision-making process in which alternative choices are eliminated. Using the example of Austria following the First World War, this article shows that hyperinflations are likely to have a path-determining effect on multiple levels. While periods of transitions offer the rare opportunity for countries to break with historical path dependence, hyperinflations carry the risk of creating new path dependence prematurely. By speeding up dynamics during transformative processes, hyperinflations eliminate possible alternatives that might otherwise have been chosen. Hyperinflations are thus best understood as neither the cause nor the consequence of transitions, but as their accelerating catalyst.