Tuesday, 13 November 2012

Hanke and Krus on hyperinflation

Steve H. Hanke and Nicholas Krus have a new Cato working paper out on World Hyperinflations. The paper supplies, for the first time, a table - see below - that contains all 56 episodes of hyperinflation, including several which had previously gone unreported. In a footnote (footnote 3, page 3) Hanke and Krus note that the number of hyperinflation could be 57:
If we were to include our estimate for the 2009-11 case of hyperinflation in North Korea, the total number of hyperinflation episodes would increase to 57. However, as explained in the notes to the table, the available North Korean data did not meet our minimum quality standards. Accordingly, we omitted this episode from the table.
The definition of hyperinflation used is that of Cagan (1956): a price-level increase of at least 50% per month. The table utilises clean and consistent inflation metrics, indicates the start and end dates of each episode, identifies the month of peak hyperinflation, and signifies the currency that was in circulation, as well as the method used to calculate inflation rates.

The highest inflation rate is Hungary in July 1946 with an inflation rate equivalent to a daily rate of 207%!

I have omitted the footnotes referred to in the table.

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