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Naked Economics: Wheelan The United States has never experienced hyperinflation, but it looks like the effects...

Naked Economics: Wheelan

The United States has never experienced hyperinflation, but it looks like the effects on an economy a seriously negative. Why would a government impose this harmful problem on its people?

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Answer #1

A Government would impose this harmful problem on its people only in case when it is falling really short on its debt payments and needs money desperately to finance its debt payments.

When the government will need money to finance its debt, it will start printing money, which will increase money supply in the economy and thus lead to drastic inflation, leading to hyperinflation.

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