Money, prices, and causality: The Chinese hyperinflation, 1946-1949, reexamined

Munir Quddus, Jin Tan Liu, John S. Butler

Research output: Contribution to journalArticlepeer-review

5 Scopus citations


Expanding on recent work by Tang and Hu (1983), this paper tests for the direction of causality between the money supply and inflation in the three currency areas of China during the hyperinflation of 1946 to 1949. As in the previous study, we find a feedback relationship between money and prices for the mainland China currency area. However, this relationship seems to be statistically significant only after including the post-reform period (August 1948 to May 1949) in the causality tests. For Taiwan and Manchuria, we find a strong one-way causality from inflation to money. These results confirm the widespread belief among economic historians that the Chinese hyperinflation was basically caused by the Nationalist governments' desperate attempts to finance its mounting war expenditures by printing money.

Original languageEnglish
Pages (from-to)447-453
Number of pages7
JournalJournal of Macroeconomics
Issue number3
StatePublished - 1989

ASJC Scopus subject areas

  • Economics and Econometrics


Dive into the research topics of 'Money, prices, and causality: The Chinese hyperinflation, 1946-1949, reexamined'. Together they form a unique fingerprint.

Cite this