Hanke's theory of hyperinflation

Hanke's theory of hyperinflation suggests that rapid, uncontrollable price increases occur when a government excessively relies on printing money to finance its spending. This surge in money supply outpaces economic growth, eroding confidence in the currency. As people lose faith, they hastily spend money before it loses more value, further fueling inflation. The cycle accelerates, leading to hyperinflation. Hanke emphasizes that restoring stability requires reducing the money supply, establishing fiscal discipline, and restoring trust in the currency to stop this destructive spiral.