What the French Revolution can teach us about inflation

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What the French Revolution can teach us about inflation
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More than 200 years later, historians are still gleaning some unexpected insights from the French Revolution—not about tyranny or liberty—but rather, inflation.

A faculty member of the UTEP Department of Economics and Finance, Rouanet is an expert in economic history, specializing in revolutionary France, and a Frenchman himself. The study advances a new framework for understanding the monetary phenomenon hyperinflation, a period of rapid and extreme price increases.

At the same time, the strength of the Jacobin party was weakening. From failing insurrections in Paris and the establishment of a new regime known as the Directory, the key drivers of the assignat were on their way out. "My research points to the importance of sound fiscal housekeeping and a strong political commitment to stable prices," Rouanet said."As it occurred during the French Revolution, politicizing the money supply increases the instability of the demand for money and prices, thus making economic life less predictable."

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