There are three examples within the last hundred years of countries which ‘printed’ money wildly in excess of what their economies could usefully use or absorb. They are the Weimar Republic of Germany in the inter-war years, Zimbabwe after independence and, currently, Venezuela. In each of those countries there was hyper-inflation leading to the impoverishment of the general public. But it was not the excess of money that created the situation, it was the collapse of the supply of available goods. Their circumstances are specific to those countries and their era and whilst they are not unique and those situations could arise again, they are – in each case – related to major events such as war, major political instability or a complete collapse of domestic production. This is why in MMT we argue that in normal circumstances it is not the amount of money created nor the size of deficit or debt which are the automatic determinants of whether an economy succeeds or fails. It is always about the matching of money to resources and the dynamics between different sectors of the economy.
For more information, please see our fact sheets on inflation and sectoral balances here.