hyperinflation

  

Definition

Ruinously high increase (50 percent or more per month) in prices due to the near total collapse of a country's monetary system, rendering its currency almost worthless as a medium of exchange. Although hyperinflation is caused mainly by excessive deficit spending (financed by printing more money) by a government, some economists believe that social breakdown leads to hyperinflation (not vice versa), and that its roots lie in political rather than economic causes. The longest lasting (15 months) hyperinflation occurred in Germany between August 1922 and November 1923 (in the aftermath of first World War) during which prices rose at an average rate of 322 percent per month, and sometimes doubled or even trebled in a single day.

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