ABSTRACT
The generally accepted operational definition of hyperinflation is by Cagan and sets the benchmark at an inflation rate of 50% a month. Countries experiencing inflation rates of 10 or 15% a month for any length of time are moving toward hyperinflation. High inflation in Poland and Yugoslavia was preceded by flight from domestic money; the accelerated dollarization characterizes the cases. Elimination of monetary overhang by means of high inflation, at the very beginning of the reform process was both useless and harmful. It was useless because it did not help least in preventing the emergence of persistent high-or hyper-inflation in socialist countries. Victor Parkin, in his analysis of Brazilian inflation, tests several hypotheses of inflation and finds out that from 1964 onward, Brazilian inflation became extremely complex and that none of the inflation theories alone are able to explain the inflationary process.
