hyperinflation

(redirected from hyperinflations)
Also found in: Dictionary, Medical, Encyclopedia.

Hyperinflation

Hyperinflation

A very high rate of inflation, especially sustained over a long period of time. While there is no set numeric definition, it is associated with inflation percentages in the millions and billions. Hyperinflation is almost always caused by poor monetary policy on the part of the government. For example, a government that rapidly increases the money supply without a corresponding growth in GDP often undergoes hyperinflation. This situation often leads to (though it may also be caused by) wider economic instability, and may lead to a lack of confidence in the government. As a result, hyperinflation that persists for a long time may lead to the government issuing a new currency entirely.

hyperinflation

A very high level of inflation that tends to result in the breakdown of the monetary system, the hoarding of goods, and difficulty in achieving real economic growth. The classic case of hyperinflation occurred in Germany during the 1920s. Hyperinflation, which tends to motivate people to own real goods, adversely affects security prices.

hyperinflation

a very high level of INFLATION.

hyperinflation

a situation of high and accelerating rates of INFLATION. Unlike CREEPING INFLATION, which usually has little ill-effect on the functioning of the economy, hyperinflation reflects a situation where people begin to lose confidence in the value of MONEY and revert to BARTER. At this point there is a serious danger of economic collapse, accompanied by growing social disorder. Hyperinflation is a rare phenomenon, but when it does occur its causes are as much political as economic: for example, the excessive printing of money to finance government spending (during wars, in particular) or an acute shortage of goods and services combined with a large pent-up demand, as in periods immediately following the ending of a war.
References in periodicals archive ?
While many elements in the stabilization strategy suggested by Bemholz would find wide agreement among economists, 1 have substantial doubt that hyperinflations are set in motion by an inflationary predisposition of politicians.
First, Bemholz added one new hyperinflation to his discussion, the 2007-08 episode in Zimbabwe, and the book's cover now contains a picture of the 100 trillion dollar note issued by its central bank.
Only two pages of text out of 213 are given over to econometric estimates, and these are related to currency substitution during the Soviet hyperinflation of 1923-24.
In the final years of its economic ruin, Zimbabwe entered into a state of hyperinflation, which culminated in a de facto dollarization of the Zimbabwean economy, made official in early 2009 by the Minister of Finance.
There are different explanations of hyperinflation to be found in academic literature.
1) of particular interest regarding previous accounts of inflation and for the readers of this publication is Mises's account of the German hyperinflation of 1920-1923 (Mises, 1932).
The present article reexamines money demand during hyperinflation using a model that allows the relative price of capital goods to vary.
We employ data from the Chinese hyperinflation (January 1946 to April 1949) to uncover empirical evidence concerning the importance of the relative price effect on money demand.
Cagan finds that in times of hyperinflation, because the fluctuation in prices is so extreme, the rate of inflation becomes the most important determinant.
Asilis, Honohan, and McNelis (1993) provide a similar study of hyperinflation and money demand in another Latin American country, Bolivia.
During hyperinflations, the spatial dimension of price arbitrage also becomes compressed.
Zimbabwe experienced the first hyperinflation of the 21st century.