Financial Terms / G - H / Hyperinflation

Hyperinflation

In economics, hyperinflation is very high and rapidly accelerating inflation. It erodes the value of the local currency, and all holders of the currency see their purchasing power evaporate. The prices of all goods and services shoot up astronomically, and citizens switch to try and hold stable foreign currencies.

The significant causes of hyperinflation are the printing of currency without the support of economic growth and demand-pull inflation, where too much money is chasing too few goods. Some examples of countries that experienced hyperinflation are Germany, Venezuela, and Zimbabwe.