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  • Definition of 'Hyperinflation'

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    Afshan Aleem
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    Hyperinflation is extreme, out of control inflation where price increases make the concept of inflation meaningless as a currency loses its value. It often occurs when money supply grows much faster than GDP, creating an imbalance between money supply and demand, or due to a loss of confidence in a currency during or after wars as sellers increase prices to offset risk.

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    Hyperinflation is extreme, out of control inflation where price increases make the concept of inflation meaningless as a currency loses its value. It often occurs when money supply grows much faster than GDP, creating an imbalance between money supply and demand, or due to a loss of confidence in a currency during or after wars as sellers increase prices to offset risk.

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    7 views1 page

    Definition of 'Hyperinflation'

    Uploaded by

    Afshan Aleem
    Hyperinflation is extreme, out of control inflation where price increases make the concept of inflation meaningless as a currency loses its value. It often occurs when money supply grows much faster than GDP, creating an imbalance between money supply and demand, or due to a loss of confidence in a currency during or after wars as sellers increase prices to offset risk.

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    © All Rights Reserved
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    DEFINITION OF 'HYPERINFLATION'

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation.
    Hyperinflation is a situation where the price increases are so out of control that the concept of inflation is
    meaningless.
    INVESTOPEDIA EXPLAINS 'HYPERINFLATION'
    When associated with depressions, hyperinflation often occurs when there is a large increase in the
    money supply not supported by gross domestic product (GDP) growth, resulting in an imbalance in the
    supply and demand for the money. Left unchecked this causes prices to increase, as the currency loses
    its value.
    When associated with wars, hyperinflation often occurs when there is a loss of confidence in a currency's
    ability to maintain its value in the aftermath. Because of this, sellers demand a risk premium to accept the
    currency, and they do this by raising their prices.

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