hyperinflation
Extremely rapid or out-of-control inflation in which prices increase rapidly and the currency loses its value.
Example
“Zimbabwe's hyperinflation in 2008 was so severe that prices doubled every 24 hours.”
Memory Tip
HYPER = excessive. Hyperinflation is inflation gone hyper — prices rise uncontrollably fast.
Why It Matters
Hyperinflation destroys the purchasing power of savings and makes financial planning extremely difficult for individuals and families. Understanding this concept helps you recognize when economic conditions are becoming unstable and when you might need to take protective measures like converting currency or investing in tangible assets.
Common Misconception
Many people think hyperinflation is simply very high inflation, but it is actually a distinct phenomenon where the rate of price increases becomes uncontrollable and currency loses value so rapidly that people may refuse to accept it. Regular inflation of 10 percent per year is serious but not hyperinflation, which typically involves monthly price increases exceeding 50 percent.
In Practice
During Zimbabwe's hyperinflation from 2007 to 2009, prices doubled every few days and people needed wheelbarrows of cash to buy basic groceries. A loaf of bread that cost 200,000 Zimbabwean dollars in January 2008 cost over 200 billion dollars by November 2008, forcing the government to eventually abandon its currency entirely and adopt foreign currencies for daily transactions.
Etymology
Hyper (excessive) + inflation — inflation that is excessive and out of control.
Common Misspellings
Learn economics & finance from top universities
Related Terms
More in economics
Other economics terms you should know
See Also
Need financial definitions?
Clear definitions for 2,500+ finance, insurance, and investing terms.