Hyperinflation - Financial definition
Concise definition of the term hyperinflation
Hyperinflation is an extremely high and typically accelerating rate of inflation, often exceeding 50% per month. It erodes the real value of the local currency, causing consumers and businesses to minimize their holdings of the currency.
Comprehensive definition of the term hyperinflation
Hyperinflation occurs when a country experiences very rapid and uncontrollable price increases. This usually results from a combination of excessive money supply growth, loss of confidence in the currency, and a collapse in demand for money.
Historical examples include Zimbabwe in the late 2000s and Germany during the Weimar Republic in the early 1920s. In these situations, people may resort to barter, foreign currencies, or commodities for transactions. Governments often respond with drastic measures, such as redenomination of the currency or economic reforms, to stabilize the economy.