At times, that full faith and credit has been misplaced – and holders of unstable currencies have been caught empty-handed in countries all over the world.
Often, this is can be a recurring theme among developing nations like those in Latin America during the debt crisis that struck the region in the 1980s.
Even some of the largest economies in the world today, though – like China, Germany, and France – have suffered devastating hyperinflationary episodes.
A major historical precursor of hyperinflation is war that destroys the capital stock of an economy and dramatically reduces output – but the misplaced monetary and fiscal policies that ensue are almost always part of the story.
For the first time, economists Steve Hanke and Nicholas Krus have compiled data on all 56 recorded hyperinflations in a new study.