%0 Journal Article %T The mechanism of double exponential growth in hyper-inflation %A Takayuki Mizuno %A Misako Takayasu %A Hideki Takayasu %J Quantitative Finance %D 2001 %I arXiv %R 10.1016/S0378-4371(02)00598-8 %X Analyzing historical data of price indices we find an extraordinary growth phenomenon in several examples of hyper-inflation in which price changes are approximated nicely by double-exponential functions of time. In order to explain such behavior we introduce the general coarse-graining technique in physics, the Monte Carlo renormalization group method, to the price dynamics. Starting from a microscopic stochastic equation describing dealers' actions in open markets we obtain a macroscopic noiseless equation of price consistent with the observation. The effect of auto-catalytic shortening of characteristic time caused by mob psychology is shown to be responsible for the double-exponential behavior. %U http://arxiv.org/abs/cond-mat/0112441v1