hyperinflation

noun

hy·per·in·fla·tion | \ ˌhī-pər-in-ˈflā-shən

Definition of hyperinflation

: extreme or excessive inflation: such as

a : excessive distension with air or gas hyperinflation of the lungs

b : extreme economic inflation with prices rising at a very high rate in a very short time But the policy also fueled hyperinflation that experts say left Iran's economy weaker in the long run.— Ramin Mostaghim also : a period of such inflation While every company may employ any of a variety of cash investment options during hyperinflation, every successful company has one policy in common … — Gerald Swanson

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Venezuela's President Nicolas Maduro is seeking a new six-year mandate — and despite crippling hyperinflation and widespread shortages of food and medicine, he is widely expected to win it. — Fox News, "AP Explains: What's at stake in Venezuelan presidential vote," 17 May 2018 Obtaining a passport has becoming increasingly difficult in Venezuela, where hyperinflation is expected to reach 1 million percent by the end of this year and there are shortages of basic supplies like paper and ink. — Martin Mejia, Fox News, "Venezuelan migrants pour into Peru before new rules enforced," 24 Aug. 2018 In today's Venezuela, where hyperinflation has devalued currency so much that going to work for a teacher can cost more than the job brings in, some parents are taking on an unusual role. — Belinda Soncini, miamiherald, "When Venezuelan teachers abandon low-pay jobs, parents are forced to become the teachers," 26 June 2018 Rampant corruption has emptied coffers leaving little for oil field investments while technicians have been quitting to flee punishing rates of crime, hunger and hyperinflation. — Kejal Vyas, WSJ, "U.S. Considers Harshest Venezuela Sanctions Yet, on Oil," 14 Jan. 2019 Their countrymen remaining behind struggle to afford what little food is available amid hyperinflation and a crumbling infrastructure has crippled vital services like water and electricity. — Claudia Torrens, The Seattle Times, "Venezuelan official to crash UN meeting on migrant crisis," 24 Sep. 2018 Their countrymen remaining behind struggle to afford what little food is available amid hyperinflation and a crumbling infrastructure has crippled vital services like water and electricity. — Claudia Torrens, Fox News, "Venezuelan official to crash UN meeting on migrant crisis," 24 Sep. 2018 More than a million Venezuelans have fled the nation in recent years amid hyperinflation, hunger and a broad economic collapse that has created a global Diaspora of the disillusioned. — Jim Wyss, miamiherald, "Peru is hotbed for Venezuelan dissidents | Miami Herald," 12 Apr. 2018 Most analysts say Citgo is destined to fall into the hands of Venezuela’s creditors as the country endures an economic calamity marked by debt defaults, hyperinflation and a collapse in oil production. — Andrew Scurria, WSJ, "Bankers Hired for Citgo Auction Following Scrapped Deal With Venezuela," 12 Dec. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'hyperinflation.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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27 Feb 2019

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The first known use of hyperinflation was in 1880

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More Definitions for hyperinflation

hyperinflation

noun

Financial Definition of hyperinflation

What It Is

Hyperinflation is a period of extremely high inflation.

How It Works

Imagine if $30,000 -- money that could buy you a car today -- was only enough to buy you dinner tomorrow. You're imagining hyperinflation -- a period of time that the International Monetary Fund defines as "beginning in the month that the rise in prices exceeds 50 percent and as ending the month before the monthly rise in prices drops below that rate and stays far below it for at least a year."

Hyperinflation happens when a country's money supply increases rapidly but its supply of goods and services don't. As you know, increases in demand without corresponding increases in supply creates increased prices for those goods and services. When this happens quickly, hyperinflation occurs.

Armed conflicts that require extraordinary defense spending, general fiscal imbalances or printing currency in order to pay off government debt are all common generators of hyperinflation because they increase money supply without a corresponding increase in goods and services. And the problem can quickly spiral because when sellers begin to believe that prices will keep going up, they keep raising prices. This usually creates crises in the banking industry because deposits dwindle and withdrawals soar. And all of these factors in turn discourage foreign investment in the currency and businesses using that currency.

Recovering from hyperinflation can take years, if not decades, and requires government adjustments to its fiscal policy.

Why It Matters

Hyperinflation reduces the efficiency of the price system and the usefulness of a country's currency as a store of value -- that is, it often leaves a country's currency worthless. The problem is typically confined to developing economies, however, so investors in these economies should consider this additional risk when investing.

Source: Investing Answers

hyperinflation

noun