Sep
10

Inflation Imbroglio

Argentina is suffering a classic currency collapse. They usually happen like this: A sudden currency decline, usually the result of bad policy, causes imported goods (like oil and food) to dramatically rise. That reduces living standards, pushing workers to demand higher wages, which in turn fuels more inflation which causes further currency depreciation. The stronger labor unions are, the faster compensating wages rise, making the process quicker and more destabilizing.

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