Cautionary tales from high-inflation emerging economies

 Cautionary tales from high-inflation emerging economies

IN RECENT MONTHS the world economy has come to resemble a badly microwaved dinner: generally hot, but with some bits merely lukewarm and others positively scorching. Consumer prices globally are likely to rise by 4.8% this year, according to the IMF, which would be the fastest increase since 2007. But price rises in emerging markets are running ahead of those in the rich world, and a few unfortunates, such as Argentina, Brazil and Turkey, are feeling particular pain. Their experience helps illustrate how and when inflation can get out of hand.

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Although inflation rates in emerging markets tend to be higher and more volatile than those in advanced economies, they did generally decline between the 1970s and the 2010s, much like those in the rich world. The median inflation rate among emerging economies fell…

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