Eli5: What type of inflation do developing countries like Argentina and Venezuela have? Is it demand-pull inflation?
In: Economics
I don’t know about Argentina, but in Venezuela it’s definitely not demand-pull. They are in an economic crisis and the supply of goods crashed as their economy is entirely dependant on exporting oil and importing other goods. Since the oil price is comparably low they simply get less supply of goods with a demand that can’t decrease arbitrarily (because people need food)
So there it’s clearly a cost-push Inflation. The government also ignored the problem and didn’t really try to stabilize it in the Chavez era.
Latest Answers