Hyperinflation, Its Effects And The Role Of The Government

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Running head: HYPERINFLATION, ITS EFFECTS AND THE ROLE OF THE GOVERNMENT
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HYPERINFLATION, ITS EFFECTS AND THE ROLE OF THE GOVERNMENT

Hyperinflation, Its Effects and the Role of the Government
Paige Stokes
University of Houston- Downtown

Abstract
Hyperinflation is not a new phenomenon. In the past century many countries have experienced this phenomenon due to various reasons. Scholars explain that when hyperinflation occurs in a nation, the value of the country?s currency highly depreciates in value to a point that it totally loses its value. This paper seeks to explain the critical role governments have in controlling hyperinflation from occurring. To illustrate this, three countries have been used, namely: Germany, Yugoslavia and Zimbabwe. This paper is divided into three sections: the theories of inflation, the effects of inflation and the example countries and the possible cures of inflation.
Keywords: Hyperinflation, Keynesian, Monetarism,

Introduction
?Inflation is a process that distorts the allocation and distribution of scarce resources by both raising the general level of prices and by altering relative price returns? (Jones, 2001). Siklos (n.d.) elaborates that hyperinflation occurs when the inflation rate exceeds fifty-percent on a monthly basis (p. 60). Inflation is not a new concept and has befallen many countries all over the world. For example, the first recorded hyperinflation to
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