Hyperinflation causes consumers and businesses to need more money to buy products due to higher prices. ... Hyperinflation can cause a number of consequences for an economy. People may hoard goods, including perishables such as food, because of rising prices, which, in turn, can create food supply shortages.

Why is hyperinflation so bad?

In economics, hyperinflation is very high and typically accelerating inflation. It quickly erodes the real value of the local currency, as the prices of all goods increase. This causes people to minimize their holdings in that currency as they usually switch to more stable foreign currencies, such as the US dollar.

What is hyperinflation and why is it bad?

Hyperinflation destroys the internal purchasing power of money and undermines its value as a medium of exchange and as a unit of account.