However simplistic, it’s hard to deny that in the public understanding of German political history, that’s the generally accepted explanation for political stagnation and crisis in the Weimar Republic.
Similarly, the German public understands hyperinflation as leading to the rise of Hitler and the Second World War. There was a genuine and severe hyperinflation crisis in the years after World War I, but the main economic reason for the Nazi ascendance to power in the early 1930s was actually a period of _deflation_ and mass unemployment. The Nazi rise to power coincided with an inflationary policy (Germany exited the gold standard in 1931), in part supported by the Nazis, that decreased unemployment and increased economic growth.
This is why it’s kind of funny when the current inflation aversion of German policymakers is attributed to a national trauma about hyperinflation. It’s true that the hyperinflationary period 1919-1923 was deeply painful for Germans and you can understand that they don’t want to repeat that, but surely the consequences of the deflationary period leading to the rise of National Socialism were worse.
(That doesn’t mean that Keynes was wrong, but a story that sees hyperinflation leading to WWII is probably too simplistic. It’s more like hyperinflation → gold standard → Great Depression → deflation → Nazis gain more seats → leave gold standard → Nazis gain absolute power.)
See http://thinkprogress.org/yglesias/2010/06/30/197736/austerit...