hyperinflation

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

|Updated on: 5 Jun 2018

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

—

hyperinflationary

play \ˌhī-pər-in-ˈflā-shə-ˌnər-ē\ adjective

See hyperinflation defined for English-language learners

See hyperinflation defined for kids

Recent Examples of hyperinflation from the Web

South Sudan's currency is in freefall and hyperinflation has squeezed virtually everyone.

— megan specia and kassie bracken, New York Times, "In South Sudan, a Never-Ending Hunger Season Puts Millions in Danger," 30 May 2018
Under the two leaders' rule, the oil-dependent country has endured political tumult and economic misery, including food and medicine shortages, and hyperinflation.

— bard wilkinson, CNN, "US expels Venezuelan diplomats as election row escalates," 23 May 2018
The economy is in shambles, with rampant hyperinflation.

— tara golshan, Vox, "Vox Sentences: Venezuela’s Maduro wins again, shocking no one," 22 May 2018
The country’s main opposition coalition is boycotting the vote, leaving Henri Falcon, a former governor, and televangelist Javier Bertucci, to attempt to animate a nation ravaged by hunger and hyperinflation.

— andrew rosati, Bloomberg.com, "Venezuelans Vote in Election Overshadowed by Crisis," 20 May 2018
Sudan is facing a currency crisis and hyperinflation that has stoked discontent, although public protests are effectively banned and regularly quashed by security forces.

— Fox News, "Sudanese President Omar al-Bashir sets big Cabinet reshuffle," 14 May 2018
Kellogg’s joins other multinationals, including Bridgestone, Kimberly-Clark, and General Mills, that have closed or reduced operations in Venezuela amid hyperinflation, shortages, and a recession deeper than the Great Depression of the 1930s.

— BostonGlobe.com, "Dell EMC agrees to pay over $2.9 million in back wages," 16 May 2018
Read more: 5 Reasons Why Venezuela’s Nicolas Maduro Won’t Last Much Longer Washington has blamed Maduro and his administration for hyperinflation and frequent shortages of food, medical supplies and other essential goods.

— eli meixler, Time, "Regional Leaders Call on Venezuela to Suspend 'Illegitimate' Election," 15 May 2018
People like Perez, Altuve and Peralta are concerned what could happen to the Venezuelan pipeline to Major League Baseball if their country and its alarming hyperinflation rate keep spinning into further crisis.

— bob mcmanaman, azcentral, "Jose Altuve, David Peralta pitching in to get baseball equipment to Venezuelan youth," 4 May 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.

First Known Use of hyperinflation

1880

in the meaning defined above

See Words from the same year

NEW! Time Traveler

Financial Definition of HYPERINFLATION

hyperinflation

noun

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