The Effects Of Hyperinflation On The Economy

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Hyperinflation as the word suggests is a situation where inflation is excessively high. This phenomenon has many consequences in an economy. Through history, there has been numerous cases of hyperinflation that have had negative repercussions in the economy of these countries and the international market. In the actuality, Venezuela has the highest inflation rate in the world. Due to various political and economic problems, Venezuela’s inflation rate for the year of 2015 was of 180.9% ("Venezuela | Economic Indicators") which is extremely high compared to other countries. The South American country is living a stage of political division, social problems and alarming economic rates. Many attribute these problems to the political decisions of the current and former presidents, Nicolás Maduro and Hugo Chávez respectively, who have been involved in various rumors for corruption. For instance, Maduro achieved the approval of a law that permits him to legislate above the Venezuelan National Assembly, who is the legislative power of the country. This change, allowed him to make decisions over the market, controlling things such as price, profit and exchange rates, while inflation was constantly rising. The president argued that this decisions were made to ensure freedom and economic rights. Furthermore, other factors in the international market also affected Venezuela. The decrease in the price of the petrol affects them directly since a high percentage of their economy is based
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