The Great Hyperinflations in History: An Austrian School Perspective

Abstract

The paper attempts to approach the circumstances surrounding the great hyperinflations in world history and to summarize what the literature or documentation have revealed on the origin of hyperinflations and how they can be addressed. We focus on the basic principles of Austrian School in order to address our concerns on the matter of inflation and hyperinflation. Proponents of Austrian School state that prices and values exist in the minds of the individuals and considered to be "subjective". Austrian economists argue that increases in supply of money, credit and shortage of goods are the sources behind inflation. Both money supply and expectations can lead to a hyperinflationary situation.