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.

Use hyperinflation in a sentence

  • Hyperinflation did occur in Argentina which provided an important lesson to economic students, I like to think we are always students of economics because there is so much to learn.

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  • The economy had a lot of hyperinflation going on, which meant everything was so much more expansive than it used to be.

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  • The economy can change very quickly and if there is hyperinflation it can be very hard to decide how much to charge.

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