Investopedia

Continue to Site »

Hyperinflation

Filed Under » , ,
Dictionary Says

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 Says

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.

One of the most famous examples of hyperinflation occurred in Germany between January 1922 and November 1923. By some estimates, the average price level increased by a factor of 20 billion, doubling every 28 hours.

Related Video for 'Hyperinflation'

Articles Of Interest

  1.

    The Consumer Price Index: A Friend To Investors

    As a measure of inflation, this index can help you make key financial decisions.

  2. What You Should Know About Inflation

    Find out how this figure relates to your investment portfolio.

  3. Introduction To Inflation-Protected Securities

    Inflation is an enemy to investors - except to those who invest in IPS, which guarantee a real rate of return with no credit risk.

  4. An Introduction To Hyperinflation

    Hyperinflation isn't some historical curiosity. It is a very real risk that countries and governments still struggle with today.

  5. The Importance Of Inflation And GDP

    Learn the underlying theories behind these concepts and what they can mean for your portfolio.

  6. Monetary Inflation

    Ever wondered why a candy bar no longer costs 50 cents? The answer is monetary inflation. Find out what this means and how it affects your purchasing power.

  7. What burst the Mississippi bubble?

    In 1715, France was essentially insolvent as a nation. Even though taxes were raised to extremely high levels, the hole that warfare had left in the French treasury was too deep. France began ...

  8. Coping With Inflation Risk

    Inflation is less dramatic than a crash, but it can be more devastating to your portfolio.

  9. Why The Consumer Price Index Is Controversial

    Find out why economists are torn about how to calculate inflation.

  10. Predict Inflation With The Producer Price Index

    Find out how the PPI can be used to gauge the overall health of the economy.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  2. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  3. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  4. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.

  5. Icarus Factor

    The term Icarus factor describes a situation where managers or executives initiate an overly ambitious project which then fails. Fueled by excitement for the project, the executives are unable to reign in their misguided enthusiasm before it is too late to avoid the failure.

  6. Angelina Jolie Stock Index

    An index made up of a selection of stocks from companies associated with actress Angela Jolie.
Trading Center