The long shadow of hyperinflation: Or: The security preference of the Germans, their consequences for public finances, capital investments and corporate finance

Abstract

Germany has some peculiarities when it comes to dealing with financial issues. These include the low return from the extensive international investments out of this export-oriented economy, the inadequate provision of venture capital even decades after the first finding, and the very restrictive regulation of public debt compared to many similarly developed economies. The three aspects have a common pattern insofar as they indicate a lack of willingness to rely on future growth and to accept risks. How can this high preference for stability and security be explained? For this, in the tradition of Geert Hofstede, questions are asked about the formative cultural attitudes and the twofold experience of hyperinflation in the 20th century are identified as the historical background for Germany. What economic policy options there are despite habitual fixations will be discussed in conclusion. The answer lies in the mobilization of state investments, an infrastructure for innovation and a positive image of entrepreneurial spirit.