Hyperinflation

noun (uncountable)

/ˌhaɪpərɪnˈfleɪʃn/

An extreme and rapid escalation of price levels — conventionally defined by economist Phillip Cagan (1956) as a monthly inflation rate exceeding 50% (equivalent to approximately 13,000% per annum) — typically caused by uncontrolled monetary expansion to finance government deficits, collapsing public confidence in currency, or supply shocks in a context of fiscal collapse. Historical episodes include Weimar Germany (1923), Zimbabwe (2007-09, peak of 89.7 sextillion % per month), and Hungary (1946, the worst recorded). India has never experienced hyperinflation but studied it in the context of Sri Lanka's 2022 crisis; the RBI's inflation-targeting framework under the MPC (mandated 2-6% CPI) is explicitly designed to prevent such spiral dynamics.

✍️ Usage in a UPSC answer

Venezuela's monthly price increases of 233,000% in 2019 — driven by bolivar printing to fund petro-state subsidies amid collapsing oil revenues — stand as the starkest contemporary case study of how hyperinflation destroys the savings of working households within weeks.

Synonyms

runaway inflationgalloping inflationexplosive inflationmonetary meltdown

Antonyms

price stabilitydeflationdisinflationzero inflation

🌱 Word Family

hyperinflationary (adjective), inflation (noun), inflate (verb), hyperinflate (verb), stagflation (related noun), disinflation (related noun)

🔡 Root

Greek hyper- = over, beyond + Latin inflatio = a blowing up; in- = into + flare = to blow

📜 Etymology

Formed from Greek hyper- (over, excessive) and inflation (from Latin inflare, to blow into, inflate). The word 'inflation' in an economic price context emerged in the 1830s in American monetary literature; the intensified compound 'hyperinflation' appeared in academic economic literature in the 1920s, precisely as the Weimar episode was unfolding, and was given its formal quantitative threshold by Phillip Cagan in his 1956 study.

🧠 Memory Hook

HYPER = BEYOND NORMAL. Like a HYPERACTIVE child who cannot stop running, HYPERINFLATION is inflation that CANNOT STOP — prices double, then double again, then double daily. HYPER = out of control.

💰 Indian Economy 📖 Seen in: Indian Economy — Growth, Planning & De...

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