North Korea’s Hyperinflation Legacy

North Korea’s Supreme People’s Assembly met on Tuesday. The failed communist state failed to deliver on its advertised economic reforms. The big change introduced by the all-knowing Assembly was in the area of food and fuel rations. Teachers will have their rations increased. Fine. But, I wonder whose bowl those bumped-up rations will come from. Never mind.

North Korea’s communist economic legacy—in addition to starvation—is hyperinflation. North Korea is one of only 40 countries in the world that have experienced hyperinflation. In our recent Cato Working Paper, Nicholas Krus and I concluded that a North Korean episode of hyperinflation occurred from December 2009 to mid-January 2011, with an estimated peak monthly inflation rate of 496 percent, in March 2010. At this rate, prices were doubling every 14.1 days. Alas, the horrors of hyperinflation will linger, generation after generation. What a legacy.