Venezuela is the fifty-seventh country to encounter hyperinflatio n in modern history. The economist Steve Hanke estimated — using the doctrine of purchasing power parity (PPP) — that the country’s monthly inflation exceeded 50 percent for more than thirty days in November 2016. Therefore, it entered the list of Hanke-Krus hyperinflations .The International Monetary Fund (IMF) estimates that Venezuela’s annual inflation will reach 1,000,000 percent by the end of 2018, and the country’s National Assembly recently estimated that it would reach 4,000,000 percent. Notwithstanding the estimates, predictions made in hyperinflationary periods are always erroneous because inflation volatility increases along with inflation rates . As shown in the graph above, annual inflation calculated on October 2 was more than 56,000 percent. If we look at the average volatility calculated thirty days prior, it increases at the same time. This runaway inflation is the other side of the coin of the […]