Hyperinflation
Extremely rapid, out-of-control inflation, classically prices rising more than 50% in a month.
In plain words
Hyperinflation is inflation so fast it destroys the currency's usefulness as a store of value. The classic definition (Cagan, 1956) is a monthly rate above 50%. In practice, any monthly rate above 5–10% is already seriously destabilising. Germany 1923 and Zimbabwe 2008 are the textbook examples.
Frequently asked questions
What counts as hyperinflation?
The standard definition (Cagan 1956) is a monthly inflation rate above 50%, equivalent to over 12,000% annually. In practice any sustained monthly rate above 5–10% is already severely disruptive.
How does hyperinflation end?
Usually through a currency reform, fiscal consolidation, or foreign exchange backing. Germany ended the 1923 hyperinflation by introducing the Rentenmark backed by mortgages on land. Zimbabwe adopted the US dollar in 2009.