Hyperinflation

Hyperinflation refers to an extremely high and typically accelerating rate of inflation, often exceeding 50% per month. It occurs when there is a rapid increase in the Money-supply/">Money Supply that outpaces economic growth, leading to a loss of confidence in a currency. As prices soar, the value of Money erodes, causing consumers to spend quickly before prices rise further, which exacerbates the inflation cycle.

Examples and Cases:

• Weimar Republic (Germany, 1921-1923): After World War I, Germany experienced hyperinflation, with prices doubling every few days. People needed wheelbarrows full of cash to buy basic goods.
• ZiMBAbwe (2000s): In the late 2000s, ZiMBAbwe faced hyperinflation, peaking at an astronomical rate of 89.7 sextillion percent per month. The government printed excessive amounts of Money, leading to widespread poverty and loss of savings.
• Hungary (1945-1946): Post-World War II Hungary saw one of the worst cases of hyperinflation in history, with prices doubling every 15 hours. The government eventually introduced a new currency to stabilize the economy.