Hyperinflation is caused by abnormally high growth

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Unformatted text preview: curred in Germany in 1923, when inflation rose to more than 100 percent per week. Figure 5 illustrates the weekly percentage increase in prices in Germany in 1923. Hyperinflation The German government needed to make large payments because of the large expenses incurred during World War I and the demands for reparations made by the war's victors. Because the government was unable to raise taxes, it had to print large sums of money, which led to the hyperinflation. The Relation Between Money Growth and Inflation German Hyperinflation of 1923 Hyperinflation Other Episodes of Hyperinflation Brazil: Inflation in Brazil averaged 43.6 percent per year from 1912 until 1996. A good that cost one dollar in 1912 would cost one quadrillion dollars in 1996. Chile: Inflation averaged 90 percent per year in the 1970s. Money and Prices in Brazil and Chile During the Twentieth Century Hyperi...
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