Hyperinflation

What is hyperinflation?

Hyperinflation is a type of inflation that consists of the massive increase in prices, during a certain period of time.

Is occurs when inflation is very high in a short period of time. At the same time that it happens, said currency loses its real value and therefore monetary patrimony is lost of people.

Various economists and international standards state that once inflation exceeds 50% monthly or 100% annually, it is considered hyperinflation.

Causes of hyperinflation

The main causes that produce hyperinflation in an economy are the following:

• The excess money supply, that is, a massive increase in the amount of money in circulation, which is not compatible with the growth of the production of goods and services.
• Accumulation of public debt from a country.
• Spontaneous devaluation.
• Spontaneous drop in savings of people.
• A extreme political context, such as a war or an economic crisis.

Examples of hyperinflation in countries

To bring this concept to reality, we propose some examples of hyperinflation throughout history:

• Argentina it has suffered various processes of hyperinflation. In 1989 there was a 3000% annual inflation, which is considered as hyperinflation.
• After losing World War I, Germany has managed to register a hyperinflation of more than 20% per day, exceeding the 30000% per annum.
• In 2015, Venezuela recorded inflation of more than 9000% per annum, which is considered as hyperinflation.
• Between the years 1982 and 1985, Bolivia it reached an inflation of more than 150% per month and 8000% per annum.
• At the end of the 18th century, during the French Revolution, France recorded inflation of more than 300% monthly.