Inflation in Venezuela
Ethan Esquivel
MW2
May 19, 2014
There are a variety of economic problems in today’s society. One of which is inflation, or a raising of prices and lowering of currency value. Venezuela is currently experiencing inflation. Inflation, which was caused by failure of socialism, is making the people protest because of higher prices and lower currency value.
Venezuela is in a state of heavy inflation. In February, inflation rose to fifty-seven percent (Minaya).Problems with the exchange rate and too much aggregate demand are some of the major causes of inflation (Jay). The inflation rate in Venezuela in 2012 was just ten percent, but began to rise in the Fall, and so did the black market rate of the dollar (Weisbrot). In 2012, Venezuela 's inflation rate was only ten percent, but due to problems in the economy, it began to rise in the Fall. This was a precursor to the protests in 2013, where people were protesting the government because of the high inflation rate, which was then around forty percent. There are protestors in Venezuela protesting the government because of high inflation.
Problems in the economy and changes in the government have contributed to inflation in Venezuela. “…the structural element is that Venezuela is an oil-producing economy. And what this has meant is that it receives lots of petrodollars flooding the economy, which tend to raise prices in general, because this money comes into the economy and, basically, raises the money supply in the country and tends to make everything, as a result, more expensive” (Wilpert). When the Chavez government switched to socialism, there was a big capital flight, which basically lowered the value of the currency (Wilpert). “Venezuela was hit, in the 2008 global economic crises, with a price drop of their oil, causing fewer dollars to be available for imports and currency control. This led to Venezuela borrowing money, instead of paying for the imports, with its foreign currency reserves” (Wilpert).
MW2
May 19, 2014
There are a variety of economic problems in today’s society. One of which is inflation, or a raising of prices and lowering of currency value. Venezuela is currently experiencing inflation. Inflation, which was caused by failure of socialism, is making the people protest because of higher prices and lower currency value.
Venezuela is in a state of heavy inflation. In February, inflation rose to fifty-seven percent (Minaya).Problems with the exchange rate and too much aggregate demand are some of the major causes of inflation (Jay). The inflation rate in Venezuela in 2012 was just ten percent, but began to rise in the Fall, and so did the black market rate of the dollar (Weisbrot). In 2012, Venezuela 's inflation rate was only ten percent, but due to problems in the economy, it began to rise in the Fall. This was a precursor to the protests in 2013, where people were protesting the government because of the high inflation rate, which was then around forty percent. There are protestors in Venezuela protesting the government because of high inflation.
Problems in the economy and changes in the government have contributed to inflation in Venezuela. “…the structural element is that Venezuela is an oil-producing economy. And what this has meant is that it receives lots of petrodollars flooding the economy, which tend to raise prices in general, because this money comes into the economy and, basically, raises the money supply in the country and tends to make everything, as a result, more expensive” (Wilpert). When the Chavez government switched to socialism, there was a big capital flight, which basically lowered the value of the currency (Wilpert). “Venezuela was hit, in the 2008 global economic crises, with a price drop of their oil, causing fewer dollars to be available for imports and currency control. This led to Venezuela borrowing money, instead of paying for the imports, with its foreign currency reserves” (Wilpert).
Cited: Minaya, Ezequiel. “Venezuela 's annual inflation rate hits 57.3%.” Market Watch. 14 Mar. ……2014. Web. 19 May 2014. Finley, JC. “Protest camps disassembled by Venezuelan security forces; 243 detained.” ……UPI. 8 May 2014. Web. 19 May 2014. Orozco, Jose. “Venezuela Boosts Minimum Wage 30% on World’s Fastest Inflation.” ……Bloomberg. 29 Apr. 2014. Web. 19 May 2014. “Venezuela detains dozens of anti-government protesters.” BBC News. 15 May 2014.m ……Web. 19 May 2014. “Venezuela’s Inflation Rate: Causes and Solutions.” Democratic Underground. 11 Feb ……2011. Web. 19 May 2014. Will Venezuela 's New Floating Exchange Rate Curb Inflation?. The Real News, 2014.m ……Web. Why Is Inflation so High in Venezuela?. The Real News., 2014. Web.