Inflation Essay Example | Topics and Well Written Essays - 500 words

Inflation - Essay ExampleThere have been cases virtually the globe known as hyper pretension. Though there is no official definition for it, it is generally accepted as a 50% annual inflation rate. Ecuador suffered through a 96% inflation rate in 2000 (Background Note Ecuador). This was caused by a weak economy, massive debt from El Nino in 1998, and a floating currency. The president was ousted in Jan. 2000 and caused a 75% spike in a one-month period. The new government restructured the debt, privatized state owned industries, and tied the currency to the US dollar. The following years saw lower range and it had dropped to 1.9% in 2004 (Background Note Ecuador).The war and economic hardships in the former Yugoslavia resulted in inflation rates in the period 1971-91 of 69 percent, with hyperinflation of more than 50 percent per month in 1989 (Hanke). According to experts, Slobodan Milosevic triggered the hyperinflation by granting $1.8 billion in unauthorized credits to Serbian-ow ned enterprises (Hanke). It was plainly brought under control when the war ended and a new government was installed.Though the UAE and Dubai have not seen these rates of inflation, it has been on the rise in late(a) years. It was 2.8% in 2002 and is estimated to hit 20% in 2006. That was up from 10.5% in 2005 (United Arab Emirates). The rate was 3.2% and 4.6% in 2003-2004.