A term used to denote rapid, excessive, and out-of-control price increases in an economy. Generally, hyperinflation is differentiated from regular inflation (or the measure of the ricing prices of goods and services) by an extremely rapid rise in prices, typically measured by more than 50% per month. Hyperinflation has two primary causes: an increase in the money supply or demand-pull inflation. The former occurs when a government begins rapidly printing money to cover its spending. In demand-pull inflation, a surge in demand strips a supply, causing prices to rise. Inflation is a compounding issue; when consumers realize prices are rising, they expect the rise to continue. So they buy now to avoid paying more in the future, which makes the inflation worse and creates a cyclical issue.
Hyperinflation
Market Terms
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