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Hyperinflation in Developing Countries
Hyperinflation is the process through which inflation levels in a given country increase
leading to erosion of money value. The aftermath of hyperinflation is tension among consumers
where their purchasing power is compromised leading to declining investments and savings. As
compared to the ordinary economy that operates within the required market conditions,
hyperinflation is about commodity prices being volatile to the extent of destabilizing the market
(Abubakar 58). Intervention mechanisms such as using foreign currency is common among
hyperinflation prone nations such as developing regions of the world.
In the context of developing nations, the hyperinflation condition has become a problem
considering the many influences that destabilize the economic systems. The reason why
developing nations have had this problem is because of weak economic models that cannot
survive shocks such as war and drought. Nations such as Zimbabwe and Yugoslavia have
experienced this economic condition owing to political influence that comes in the way of
economic growth.
Developing Countries and Hyperinflation
From an economic point of view, resource wastage is the leading cause of hyperinflation
and is characterized by taking debts at high interest rates for funding economic activities and
