"But does inflation lower the level of consumption?"
Of course. How else do you explain your statement that hyperinflation tends to kill an economy? Hyperinflation kills an economy by strangling consumption (demand).
The higher the inflation, the more economic contraction there will be. And the more economic contraction there are, the less tax revenue a government collects.
Isn't that the basic reason why governments everywhere want to keep the inflation as low as possible?
