ABSTRACT
Factories reduced their output and unemployment rose, aggravated by the numbers of demobbed troops returning onto the labour market. The decline was accentuated as inflation and the constant depreciation of the exchange rate led many countries to implement austerity policies. During the short-lived phase of expansion it was mistakenly thought that the conversion of the war economy to a peace economy would be relatively quick and straightforward. Political and financial circles concluded that the world economy could be restored to equilibrium by returning as quickly as possible to the gold standard. In 1923 it collapsed completely, becoming practically worthless. The crisis was accelerated by the French and Belgian occupation of the Ruhr, despite the disapproval of Great Britain and the United States. Hyperinflation came as another devastating blow to German society, a dizzying feeling that everything was spiralling out of control and that previous stability was completely and utterly lost.
