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Hyperinflation

Hyperinflation is an extreme and rapid increase in the prices of goods and services, typically exceeding 50% per month. It often occurs when a country's central bank prints excessive amounts of money, leading to a collapse in the currency's value.Hyperinflation can devastate economies by eroding the purchasing power of money, wiping out savings, and causing economic instability. It is often associated with political instability, war, or poor fiscal management.

Example

Zimbabwe experienced hyperinflation in the late 2000s, with inflation rates exceeding 79.6 billion percent, leading to the collapse of its currency and the need for a new monetary system.

Key points

• Extreme and rapid inflation, often exceeding 50% per month.

• Causes currency collapse, loss of purchasing power, and economic instability.

• Often triggered by excessive money printing, political instability, or war.

Quick Answers to Curious Questions

Hyperinflation is typically caused by excessive money printing, loss of confidence in the currency, or poor fiscal policies that erode the currency’s value.

It leads to a collapse in purchasing power, making goods and services unaffordable, destroying savings, and causing severe economic instability.

Notable examples include Zimbabwe in the 2000s and Germany’s Weimar Republic in the 1920s, both of which experienced runaway inflation and economic collapse.