Friday, August 21, 2009
Zimbabwe Ten Trillion Dollar Note (AP Photo/Liz Schultz)
Struggling from political repression and failed economic policies, Zimbabwe has the distinction of not only experiencing the first case of hyperinflation in the 21st century, but the second highest ever in recorded history. According to two economics professors from The Johns Hopkins University, Zimbabwe had a monthly inflation rate last November of 79.6 billion percent, during which prices throughout the country doubled every 24 hours.
As high as Zimbabwe’s inflation was, it still did not come close to matching the No. 1 hyperinflation of all-time: Hungary in July 1946, which literally went off the standard mathematical scale and was recorded as 4.19 x 10[1] percent. Hungarians at that time only had to wait 15 hours for food and other prices to double during the runaway inflation.
According to professors Steve H. Hanke and Alex K. F. Kwok, a total of 30 hyperinflations have been recorded in modern history. Most of them (17) occurred in Eastern Europe and Central Asia, with Latin America accounting for five, Western Europe four, and Southeast Asia and Africa each with two.
The closest the United States ever came to experiencing hyperinflation was during the Revolutionary War, when the Continental Congress’ approval of printing extra currency resulted in a monthly inflation rate of 47%.
-Noel Brinkerhoff
On the Measurement of Zimbabwe’s Hyperinflation (by Steve H. Hanke and Alex K. F. Kwok, Cato Journal)
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