What are facts about ancient rome inflation?

Answer 1

Runaway inflation occurred during the crisis of the 3rd century. During this crisis: 1) there were continuous attacks across the fvast rontiers of the empire which overstretched the army; 2) as a result of this stress there was a string of usurper emperors who were local generals whose rebellion was supported by their legions; 3) hyperinflation.

Runaway inflation was caused by many years of debasement of the Roman coins. The precious metal content of coins was continually decreased. This effectively devalued the coins which eventually came to have virtually no value. Moreover, the usurper emperors minted their own coins. This exacerbated devaluation because it increased the amount of coins in circulation. The effects of hyperinflation were:

1) A breakdown in trade. It became difficult to exchange goods with a worthless currency. Moreover, continuous war made it unsafe for merchants to travel.

2) Agricultural production on the large landed estates became localised. The estates stopped selling crops to the cities. They concentrated on production for local barter.

3) The urban economy collapsed because of the disruption of long-distance trade. Manufacturing shrunk. The population of the cites greatly decreased

4) Many people migrated from the cities to the countryside

5) The owners of the large estates employed the migrants as servile labour. These people lost their rights and became tied to their landlords.

6) The tax revenue of the state decreased. At the same time expenditure increased as the size of the army increased and there was greater reliance of a greatly expanded cavalry, which was even more expensive to maintain. This was the result of the constant invasions. Consequently, goods were demanded as an additional form of taxation, which did not help the economy. Emperor Diocletian resorted to confiscating goods.

7) The overall result was a decline of the economy of the empire which became fragmented and localised.

The western part of the empire was hit harder because Italy was highly urbanised and because northern Gaul was devastated by raids by the Germanic Franks and Alemanni.