Överinflation

Överinflation, a Swedish term translating to "over-inflation" or "excessive inflation," describes a state of rapidly rising prices in an economy. It is a more extreme form of inflation where the rate of price increase accelerates significantly and becomes difficult to control. While regular inflation erodes purchasing power gradually, överinflation can decimate it in a very short period, making money virtually worthless.

This phenomenon is typically characterized by extremely high and often accelerating inflation rates, far exceeding what is considered normal or even high inflation. The causes of överinflation can be complex and often involve a combination of factors. These may include severe supply shocks, such as a sudden and drastic reduction in the availability of essential goods, or a complete loss of confidence in the government's ability to manage the economy. Excessive printing of money by the central bank to finance government deficits is also a common driver.

The consequences of överinflation are devastating for an economy and its population. Savings become worthless, the value of currency plummets, and businesses struggle to set prices or plan for the future. Bartering may become a common form of exchange as the monetary system collapses. Restoring stability after a period of överinflation often requires drastic economic reforms, including fiscal austerity and the introduction of a new, stable currency.