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

Inflation - Essay manikinThere have been cases around the globe known as hyperinflation. Though there is no authoritative 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, coarse 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 rates and it had dropped to 1.9% in 2004 (Background Note Ecuador).The war and economic hardships in the origin 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 -owned enterprises (Hanke). It was only brought under suss out 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 recent years. It was 2.8% in 2002 and is estimated to hit 20% in 2006. That was up from 10.5% in 2005 ( fall in Arab Emirates). The rate was 3.2% and 4.6% in 2003-2004.