Hyperinflation is very high inflation, typically over 50% per month, that occurs when prices rapidly increase out of control. It can be caused by large fiscal deficits funded by increases in the money supply. To tame hyperinflation, countries must slash fiscal deficits, end central bank funding of deficits, separate central bank control from government control, and control money supply growth or exchange rates by establishing a nominal anchor for prices. Preventing hyperinflation requires dramatic interest rate hikes, reducing government spending and debt, and raising bank reserve rates, but these steps also carry economic side effects.

1. HYPER INFLATION THEORY

2. Definition for hyper inflation
Hyperinflation is
inflation that is very
high or "out of
control", a condition in
which prices increase
rapidly. usually more
than 50% a month.

3. Causes

4. An example

5. Effects

6. How it can be tamed?
• Fiscal deficit must be slashed.
• Central bank funding of the reduced deficit
ended.
• Separating the activities of the central bank
from the control of government.

7. • Controlling of either the money supply or the
exchange rate.
• Establishment of a ‘nominal anchor’ against
which all prices could be measured.

8. Prevention
• Increase the interest rate dramatically.
• Cutting government spending and debt.
• Increasing reserve rates for banks.
But each of these steps might have their
own side effects in the economy.

9. Conclusion

10. Thank you