Modern Hyper- and High Inflations

Since 1947, hyperinflations in market economies have been rare. More common have been longer inflationary processes at rates above 100 percent per annum. This paper examines the main characteristics of such very high inflation episodes. We find that (i) almost 20 percent of countries have experienced such episodes; (ii) higher inflation is more unstable; (iii) in high-inflation countries, the relationship between the fiscal balance and seigniorage is strong; (iv) inflation inertia decreases as average inflation rises; (v) high inflation is associated with poor macroeconomic performance; and (vi) stabilizations that rely on the exchange rate as the nominal anchor are expansionary.