hyperinflation
noun
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Definition of hyperinflation
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Other Words from hyperinflation
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adjective
Examples of hyperinflation in a Sentence
Recent Examples on the Web
Factories were closing, unemployment was rising and the country abandoned its currency for the US dollar in 2009 because of hyperinflation. — Farai Mutsaka And Christopher Torchia, sun-sentinel.com, "Robert Mugabe, longtime Zimbabwe leader, dies at 95," 6 Sep. 2019 The present capital gains tax is particularly brutal to older Americans who bought a home, built a small business or invested in the stock market before the hyperinflation of the late 1970s. — Grover Norquist, Twin Cities, "Grover Norquist: Indexing capital gains helps more than the rich," 29 Aug. 2019 The present capital gains tax is particularly brutal to older Americans who bought a home, built a small business or invested in the stock market before the hyperinflation of the late 1970s. — Grover Norquist, The Denver Post, "Grover Norquist: Trump should index capital gains to spare millions of Americans from paying taxes on inflation," 27 Aug. 2019 Security issues, six-digit hyperinflation, growing flight cancellations and a simmering political standoff have lured fewer, though Venezuelans have remained steadfast in their passion for the American pastime. — baltimoresun.com, "MLB bans players from Venezuelan Winter League," 23 Aug. 2019 More than 4 million have fled the hyperinflation, blackouts and shortages of water, food and medicine of Venezuela under President Nicolás Maduro, according to the U.N. refugee agency. — Washington Post, "Colombia grants citizenship to 24,000 babies born to Venezuelan mothers," 5 Aug. 2019 The diaspora and its remittances Nearly four million Venezuelans have emigrated to other countries, including thousands to the United States, to escape the hyperinflation, grave shortages of food and medicines and high crime. — Sonia Osorio, miamiherald, "Even in Miami, Venezuelans can't escape the hardships of their homeland | Miami Herald," 11 May 2018 With his savings devastated by Venezuela’s hyperinflation, Aranda was only able to scrape together the equivalent of $30 for the journey. — Washington Post, "Venezuelan man makes ‘one-legged’ trek across South America," 19 Aug. 2019 At least four million Venezuelans have fled their country in recent years, forced out by hunger, hyperinflation and deadly political crackdowns. — New York Times, "They Survived Colonization and War. But Venezuela’s Collapse Was Too Much.," 30 July 2019These 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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More Definitions for hyperinflation
hyperinflation
nounFinancial 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
English Language Learners Definition of hyperinflation
See the full definition for hyperinflation in the English Language Learners Dictionary
hyperinflation
noun
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