Sadly we have no strict official
definition of hyperinflation but the usual rule of thumb is that an inflation
rate of over 50% a month qualifies for the hyper- not just the inflation. And
with estimates of Venezuela’s annual inflation rate running in the 700 to 800%
sort of range the country’s not that far off the joy of joining Zimbabwe,
post-WWII Hungary and Weimar Germany in the hall of shame. Megan McArdle has a
nice piece about why this has happened and I agree with most of it. I just want
to add one more thing really. Hyperinflation isn’t so much when there’s too
much money chasing the goods: it’s when the system flips over to the velocity
of money circulation increasing that’s the identifying point. At which point a
shout out to Frances Coppola here at Forbes who helped clarify my thinking on
this. More… 
Wednesday, September 2, 2015
Venezuela Doesn't Quite Have Hyperinflation Yet But It's Getting There
Sadly we have no strict official
definition of hyperinflation but the usual rule of thumb is that an inflation
rate of over 50% a month qualifies for the hyper- not just the inflation. And
with estimates of Venezuela’s annual inflation rate running in the 700 to 800%
sort of range the country’s not that far off the joy of joining Zimbabwe,
post-WWII Hungary and Weimar Germany in the hall of shame. Megan McArdle has a
nice piece about why this has happened and I agree with most of it. I just want
to add one more thing really. Hyperinflation isn’t so much when there’s too
much money chasing the goods: it’s when the system flips over to the velocity
of money circulation increasing that’s the identifying point. At which point a
shout out to Frances Coppola here at Forbes who helped clarify my thinking on
this. More… 
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment