AER-当货币消亡：投机性恶性通货膨胀的动态机制

American Economic Review 2025, 115(4): 1301–1337 https://doi.org/10.1257/aer.202310081301When Money Dies: The Dynamics of Speculative Hyperinflations†By Guillaume Rocheteau*How quickly does a fiat money become valueless? I study the specu-lative hyperinflation equilibria of continuous-time economies with decentralized markets where money is essential. I establish neces-sary and sufficient conditions under which money dies in finite time. A necessary condition is that the liquidity return of money grows unbounded as the value of money approaches zero. Under CRRA preferences, the longevity of money shrinks with the money growth rate and the frequency of liquidity needs, but it increases with sell-er’s market power. Money duration also depends on the strictness of legal restrictions and the rates of return of competing currencies. (JEL E31, E42, E51, E52, E62)How fast can a fiat money become valueless? The assignat introduced in France at the onset of the French Revolution, in December 1789, and described by Levasseur (1894, p. 179) as “the biggest experiment with paper money ever tried” provides one answer to this question. While the assignat was initially backed by land and subject to legal restrictions, it became a full-fledged fiat currency after the Reign of Terror ended in 1795 (Sargent and Velde 1995, p. 508). As the assignat lost its backing, “it went on depreciating and falling in value until it approached so near to worthless that a beggar in the street would hardly deign to accept one” (Dillaye 1877, p. 39).The French example of the death of a fiat money is not unique.1 The German Papiermark experienced hyperinflation in 1922–1923, with the monthly inflation rate peaking at 30,000 percent.2 It was replaced with the rentenmark at the end of 1923. More recently, hyperinflation occurred in Zimbabwe, from March 2007 to November 2008, with a monthly inflation rate culminating at 100 billion percent (Hanke and Kwok 2009). In 2009, the Zimbabwe dollar was demonetized, and the 1 The episode of the French assignat parallels the Continental currency introduced in 1775 to fund the US Revolutionary War. By the end of the war, in 1781, the real value of the Continental had been divided by a factor of 100. This episode gave rise to the idiom “not worth a Continental,” which refers to anything worthless. See https://curiosity.lib.harvard.edu/american-currency/feature/continental-currency.2 For a description of the German hyperinflation, see Fergusson (1975).* University of California, Irvine (email: grochete@uci.edu). Mikhail Golosov was the coeditor for this article. I thank the editor and three anonymous referees for their constructive comments. I also thank Yifeng Yu for his insights. Finally, I benefited from the feedback of Zach Bethune, Jerome Bolte, Tai-Wei Hu, Gary Richardson, Quentin Vandeweyer, Lu Wang, the participants at the 2023 Wharton conference on liquidity and financial fragility, the 2023 NYU Search-and-Matching conference, the