After years of research with the help of many assistants, I have documented and ranked 58 episodes of hyperinflation, which are presented in the Routledge Handbook of Major Events in Economic History. Hungary holds down the top spot. Its peak hyperinflation occurred in July 1946, when prices were doubling every 15 hours. Zimbabwe’s November 2008 hyperinflation peak is second highest, but way behind Hungary’s. At their peaks, the daily inflation rates were 207 percent in Hungary and 98 percent in Zimbabwe. The most memorable hyperinflation was Germany’s in 1923. But, it only ranks as the fifth highest, with a peak daily inflation rate of 20.9 percent — way lower than the top four rates.
Now, let’s turn to the world’s only current hyperinflation: Venezuela. It ranks as the 14th most severe episode in history. Today, the annual rate of inflation is 2,986 percent. While this rate is modest by hyperinflation standards, the duration of Venezuela’s episode, as of today, is long: 38 months. Only two episodes of hyperinflation have been more long‐lived.
Even though we can measure hyperinflation very accurately, no one has ever been able to forecast the magnitudes or durations of hyperinflations. But that hasn’t stopped the International Monetary Fund (IMF) from producing forecasts for hyperinflation in Venezuela. Even though the IMF does not measure Venezuela’s hyperinflation, something that can be reliably done, the IMF does forecast hyperinflation, something that cannot be reliably done.
Surprisingly, the press dutifully reports the IMF’s forecasts for Venezuela’s annual inflation rate. For example, as late as October 2019, the IMF was forecasting that Venezuela’s annual inflation rate would hit a whopping 200,000 percent by the end of the year. Well, the IMF’s “guestimation” was a bit off. I measured Venezuela’s annual inflation rate on December 31, 2019, and it was 6,869 percent.
But it turns out that the IMF isn’t the only one making finger‐in‐the‐wind forecasts of hyperinflation. The Trump administration’s special envoy for Iran, Brian Hook, recently asserted that U.S. sanctions against Iran would fuel a hyperinflation. Well, even though Iran came close to a hyperinflation in October 2012, it failed to jump over the hurdle. And today, Iran isn’t even close to the hyperinflation threshold. Indeed, since the New Year, the Iranian rial has been very stable against the greenback on the black market, and the official annual inflation rate is 38.6 percent. And, according to my most recent measurements, Iran’s inflation rate is falling.