hyperinflation

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

|Updated on: 31 Jul 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

Falcon's backers showed their dissatisfaction with hyperinflation by tearing up worthless 500-bolivar notes and throwing them into the air like confetti.

— fabiola sanchez and scott smith, Fox News, "Grave crisis drives apathy in Venezuelan election," 17 May 2018
As Venezuela has rocketed into hyperinflation, drugs and supplies — almost all of them imported — are increasingly unaffordable.

— anthony faiola and rachelle krygier, Washington Post, "Blackouts, hyperinflation, hunger: Maduro faces reelection as Venezuela deteriorates," 16 May 2018
Apollo Endosurgery said that as of March 31, the global rate of spontaneous hyperinflation of its devices after operations was 0.07%, and the gastric perforation rate was 0.01%.

— susan scutti, CNN, "Weight loss balloons now linked to 12 deaths," 4 June 2018
There was, in theory, no way to tamper with the accounting, no possibility of counterfeit, and no threat of hyperinflation.

— gideon lewis-kraus, WIRED, "The Blockchain: A Love Story—And a Horror Story," 18 June 2018
Because of chronic medicine shortages and the hyperinflation in Venezuela in the past eight months, getting medicines is extremely hard.

— stefano pozzebon and susan scutti, CNN, "Polio re-emerges in Venezuela nearly 30 years after eradication," 11 June 2018
Food shortages and hyperinflation have led 1 million Venezuelans to flee to this country.

— juan forero, WSJ, "Ivan Duque Wins First Round of Colombian Presidential Election," 28 May 2018
Using the black market rate for dollars, a professor's salary here now tops out at about $8 a month, because of hyperinflation.

— anthony faiola and rachelle krygier, chicagotribune.com, "A historic exodus is leaving Venezuela without teachers, doctors and electricians," 4 June 2018
Hunger, hyperinflation, and skyrocketing malaria rates can have that effect.

— heather souvaine horn, The New Republic, "Venezuela is on the brink, and the U.S. might push it over.," 21 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