I don't see the mechanism for causing hyperinflation in the U.S., mainly because most businesses can't or won't give their employees raises and don't deal with that much case any more.
From what I've read about Germany's hyperinflation, for example, it got to the point where businesses would pay their employees with sacks full of paper money twice a day. The employees would then hand the money off to relatives who would go immediately to stores to buy what the household needed before prices went up later in the day.
Does anyone seriously propose that this could happen in the U.S. in the 21st Century?
What about printing money?
Article says in the section labeled "causes":
"There are two types of inflation agreed upon by modern economists:
- Cost-push: Where supply-side effects create the rise in prices, such as, for example, a depleting metal rising in price, because the cost to extract each unit of metal rises as it becomes more scarce.
- Demand-pull: Where demand-side effects create the rise in prices, such as with fuel, where the newly industrialized East Asian countries need oil, and thus demand huge swathes of it too, raising overall demand for fuel from the industry, or where money is simply printed, leading to more spending with no concurrent rise in product, causing demand for a same number of products to rise, and thus rising prices also."
- I also think that a too large money supply increase compared to the increase of economic activity should also be mentioned as a source of inflation. It is a problem Chili had under the dictator's regime, as can be checked in the BBC's documentary 'The history of money'. But also in many scholary articles under the name of the 'Dutch Disease'. I myself being a Dutchman can tell you, we had a high inflation when we found our first huge gasfield, because we were exporting the gas with which our government increased spending. But because the 'real' economy did not increase with the same speed as this new money was brought in, we had a lot of inflation. 22.214.171.124 (talk) 10:48, 4 December 2012 (UTC)
inflation and rising prices
Several articles link to this article using the common misnotion that inflation and rising prices are synonymous. Unfortunately, this article does not clarify that popular misconception.
While inflation can cause or result in rising prices, rising prices are not necessarily the result of inflation. Rising demand causes rising prices as well. And inflation can buoy prices in the face of falling demand. Buoying prices at an artificially high level is not the same as rising prices.
The current rise in U.S. gas pump prices is not the result of a devalued or inflated dollar, nor rising demand. It's caused by a falling supply level as the result of a refinery fire.
This article does little more than restate the errant notion that the terms, "rising prices", and "inflation", are interchangeable, which they are not. This is a disservice to readers. nobsCorporations are people, too 19:54, 16 August 2012 (UTC)
Likewise, deflation is not adequately described in this article. There are two types of deflation.
- monetary deflation: or a contraction in the money supply. A reduction in the amount of currency and money in circulation typically led to shortages of cash and higher interest rates. This is why the Gold Standard was abandoned, because the monetary base would shrink as a result of gold exports to pay international trade balances. A shortage of cash could under some circumstances lead to higher prices -- the opposite of price deflation.
- price deflation: or falling wages and prices historically was dealt with through demand side economics. Falling demand led to falling prices. Government stimulus spending was intended to create demand and the monetary base would be expanded or inflated to provide the currency for increased payrolls, increased consumer demand, higher prices, etc. nobsCorporations are people, too 20:49, 20 August 2012 (UTC)