Economics

Causes of Hyperinflation

Causes of Hyperinflation

Causes of Hyperinflation is a rare economic phenomenon, affecting the economy of a nation due to some specific factors. It may as well affect the economy of a country, due to lack of central banks. Cause of hyperinflation is a massive and rapid increase in the amount of money, which is not supported by growth in the output of goods and services. It effectively wipes out the purchasing power of private and public savings, 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.