The French Revolution Had the First Hyperinflation in History

In the last chapter we studied the development of inflation during the American War of Independence as a case nearly approaching hyperinflation. In this chapter we begin by analysing whether the French hyperinflation during the Revolution, which was the first hyperinflation in history, shows similar characteristics. This inflation, moreover, is the only hyperinflation in history during a time when most other countries were still on a silver or gold standard (Britain suspended convertibility only in 1797). . . .

During the French Revolution beginning in 1789 it soon became impossible to cover the financial requirements of the state, including the revolutionary wars, from ordinary revenues, especially since the Assemblée Nationale had lowered the taxes which were perceived by the population as repressive. To finance the budget deficit the new authorities soon issued the assignats, which were constructed to be guaranteed by land, since their holders could later use them to acquire former Church property which had been nationalised. These assignats could first only be transferred through a formal endorsement, like drafts. They still mentioned the King and were denominated in livres which had until then only been a money of account, that is they had never circulated as currency before.

Soon more and more assignats were issued, turned into bearer papers, the royal name on them was removed and their denomination changed to francs (1 franc = 1 livre). Devaluation of the currency and inflation began.

--Peter Bernholz, Monetary Regimes and Inflation: History, Economic and Political Relationships (Cheltenham, UK: Edward Elgar Publishing, 2003), 65-66.