 |
Business | Industries | Finance | Tax |
| Index: > A B C D E F G H I J K L M N O P Q R S T U V W X Y Z |
|
|||||
| First Prev [ 1 2 3 ] Next Last |
In economics, hyperinflation is inflation which is "out of control", a condition in which prices increase rapidly as a currency loses its value. No precise definition of hyperinflation is universally accepted. One simplistic definition requires a monthly inflation rate of 50% or more. The definition used by most economists is "an inflationary cycle without any tendency toward equilibrium." A vicious circle is created in which more and more inflation is created with each iteration of the cycle. Although there is a great deal of debate about the root causes of hyperinflation, it becomes visible when there is an unchecked increase in the money supply or drastic debasement of coinage.
In 1956, Phillip Cagan wrote "Monetary Dynamics of Hyperinflation", generally regarded as the first serious study of hyperinflation and its effects. In it he defined hyperinflation as 50% per year or more.
International Accounting Standard 29 describes four signs that an economy may be in hyperinflation:
Rates of inflation of several hundred percent per month are often seen. Extreme examples include Germany in the early 1920s when the rate of inflation hit 3.25 million percent per month; Greece in the mid- 1940s with 8.55 billion percent per month; and Hungary during the same approximate time period at 4.19 quintillion percent per month. Other more moderate examples include Eastern European countries such as Ukraine in the period of economic transition in the early 1990s, in Latin American countries such as BoliviaThe Republic of Bolivia is a landlocked country in western South America. It is bordered by Brazil in the north and east, Paraguay and Argentina in the south, and Chile and Peru in the west. History Main article: History of Bolivia Bolivia has long been i and PeruFor other uses, see Peru (disambiguation The Republic of Per ( Spanish: Per Quechua, Aymara: Piruw is a country in western South America, bordering with Ecuador and Colombia to the north, Brazil to the east, Bolivia to the east, south-east and south, Chil in 19851985 is a common year starting on Tuesday. Events January events January 1 Creation of the Internet's Domain Name System. January 17 British Telecom annouces they are going to abolish the famous red telephone boxes. January 23 A debate in the House of Lor and 19881988 is a leap year starting on Friday (click on link for calendar). Events January January 2 Georgia celebrates its bicentennial statehood. January 9 Connecticut celebrates its bicentennial statehood. January 26 Australia celebrates its bicentennial day.- 1990Events January January 3 Former leader of Panama Manuel Noriega surrenders to American forces. January 7 The Leaning Tower of Pisa is closed to the public due to safety concerns. January 9 Lt Gen Bazilio Olara Okello The man who led the coup aginst Dr Apo, and in BrazilThis article is about Brazil, the country. For other article subjects named Brazil see Brazil (disambiguation). The Federative Republic of Brazil Republica Federativa do Brasil in Portuguese) is the largest and most populous country in South America. in the early 1990s.
A 1,000,000,000 (1 billion) MarkAs well as being a popular male name, Mark is the name of several things of interest: Biblical Mark the Evangelist one of the gospel writers of the life of Jesus Christ. Gospel of Mark the gospel of Mark the Evangelist. The Mark refers to the forced use o banknote, issued in Bavaria/Germany during the hyperinflation of 1923 (http://www.germannotes.com)
Hyperinflation did not directly bring about the Nazi takeover of Germany; the inflation ended with the introduction of the Rentenmark and the Weimar Republic continued for a decade afterward. The inflation did, however, call into question the competence of liberal institutions. It also produced resentment of Germany's bankers and speculators (many of them Jewish) who were blamed for the inflation.
Hyperinflation is generally associated with paper money because the means to increasing the money supply with paper money is the simplest: add more zeroes to the plates and print, or even stamp old notes with new numbers. It also is the most dramatic. The history of paper money is then, replete with episodes of hyperinflation, followed by a return to "hard money". Older economies would revert to hard currency and barter when the circulating medium became excessively devalued, generally following a "run" on the store of value.
Unlike inflation, which some economists feel can be a justifiable policy choice, hyperinflation is always regarded as an destructive - it effectively wipes out the purchasing power of savings held as paper assets of the country afflicted with it, distorts the economy in favor of extreme consumption and hoarding of real assets - causes the monetary base, whether specie or hard currency - to flee the country, and makes the afflicted area anathema to investment. Hyperinflation is met with drastic remedies, whether shock therapy of slashing government expenditures or altering the currency basis. An example of this latter is placing the nation in question under a currency board as Ecuador has now in 2004, which allows the central bank to print only as much money as it has in foreign reserves. Hyperinflation is often the signs of a government in its death throes, for example, the Republic of China in the 1940s.
The aftermath of hyperinflation is equally complex, as hyperinflation has always been a traumatic experience for the area which suffers it, the next policy regime almost always enacts policies to prevent its recurrance. Often this means making the central bank very aggressive about maintaining price stability as is the case with the German Bundesbank, or the move to some hard basis of currency for example the gold standard or a currency board. Many governments have enacted extremely stiff wage and price controls in the wake of hyperinflation, which is, in effect, a form of forced savings: goods become unavailable, and hence people hoard cash, as was the case in the People's Republic of China under "Great Leap Forward" and "Cultural Revolution".
| Politics | Business | Finance |
 |
 |
 |
|