Hyperinflation

I have to work the issue.

My stating point is that the economy cannot get economies of scale by shorting its distribution network due to some restriction, generally political. The long supply chains produce volatility in inventory hence shortages and price rises.

The Weimar Republic is an example where the police action of the WW1 victors demanded Germany become an exporting nation while Germany still had to work the retail sector to feed, clothe and house its people. So the financial system is trying to mediate two incompatible productions systems. The retail sector wants longer supply chains, the export system wants shorter. In order to decorrelate the flow of funds between the two requires a greatly expanded financial system, so the transaction costs of money go way up.

Hyperinflation often results in the aftermath of war when a nation must restructure the foreign terms of trade but has aneglected the domestic terms of trade during the war. So foreign trade splits up the yield curve differently than the domestic terms of trade. Foreign exports may require a rank three production system, such as delivering machine tools to the victor of war, but the domestic economy wants a rank four production system. Finance, in an attempt to decorrelate its measures of inventory growth ends up with a 12 level distribution rank, clearly impossible. So, either collapse of one or the other occurs and hyplerinflation never last longer than a year or two.