Hyperinflation in Argentina
Argentina is among the countries that has recorded one of the highest global hyperinflation levels that continues to impact diverse effects on the country’s economy even currently. According to “Citeco.com”, between the 1975 and 1980s, Argentina’s annual inflation levels reached close to 300 percent. This was as a result of the debt crisis that hit the country during the 1980s which forced the government of Argentina to start printing more money in order to contain the recession that resulted from the debt crisis. These past events are responsible for the high levels of inflation experienced by the economy of Argentina as a country even currently.
In economics inflation can be defined as an economic occurrence that takes place when a country experiences an increase in the domestic money supply in circulation or a prolonged increase in the price levels of goods and services that are produced domestically in a country. The sum of the goods and services produced within the boundaries of a specific nation make up the country’s gross domestic product. Hyperinflation therefore is a prolonged period of inflation that affects a country that leads to erosion of the value of the country’s currency. When a country’s domestic currency becomes eroded, the citizens are often greatly affected and in order to maintain their previous financial positions, they begin holding foreign currencies that are assumed to be relatively stable and with time the domestic currency completely loses its real value (Stevenson 404). This paper therefore tries to analyze the hyperinflation in Argentina as a country because of the high levels of inflation recorded by the country’s economy over the past five years. The paper looks into the inflation levels over the past five years and the effect of this hyperinflation on both the government and the citizens of Argentina as a whole.
The country of Argentina is