Hyperinflation

Summary of Hyperinflation

A rate of inflation that exceeds 50 percent per month. Hyperinflation usually occurs during a war or its immediate aftermath when governments are in urgent need of revenue. Hyperinflation accelerates when the public concludes that the government cannot control, or actually abets, the rise in prices, thereby causing an “inflation mentality.”The most commonly cited case of hyperinflation is Germany following World War I, at which time prices rose 322 percent per month. Following World War II, Hungary suffered an even worse case of hyperinflation: prices rose at the rate of 19,800 percent per month.

(Main Author: William J. Miller)