Post
Topic
Board Economics
Re: Inflation and Deflation of Price and Money Supply
by
EdvinZ
on 01/11/2019, 04:43:23 UTC
Inflation is just a normal in developing countries, but if this inflation is already uncontrollable, it's not just an infalation, it's now called hyper inflation, just like what happened in venezuela, but thanks in cryptocurrency to save their collapsing economy. anyway, venezuela is not totally recovered yet

This is the whole problem that inflation turns from necessary to destructive for the economy. It is clear that with a developing economy, the amount of money from citizens increases, and they can afford to buy more. That is, demand increases, so there are more goods and services to meet it. Enterprises produce more products, the list of services provided to citizens is growing. Hyperinflation, which occurs when the state budget deficit and with a huge external debt, is a factor that destroys the economy of any country. A competent domestic and foreign policy is needed to keep inflation in balance and not get out of control. In our world, this is difficult to achieve because of corruption and destructive economic models between countries, which include sanctions, etc.