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Hyperinflation
Term category: Economics
In 10 words or less: A magnified situation of inflation that occurs in many developing economies.

Definition: Hyperinflation is extremely rapid inflation. During hyperinflation, the cost of goods rise at an extraordinary rate.

More details: Hyperinflation usually occurs in small, third world countries with less currency stability. In the United States, our average inflation rate is about 3.5%, however it has been as high as double digits in the 1970's.

The most famous case of hyperinflation occurred in Germany in the 1920's. Inflation was so out of control that it was cheaper to burn German currency for heat than it was to use it to buy firewood!

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