Hyperinflation Research Paper Example | Topics and Well Written Essays - 750 words

Hyperinflation - Research Paper Example (Swanson, 2004) Examples of the Hyperinflation Phenomenon If this definition of hyperinflation by economists is anything to go by, then any commodity which has a price of USD1 at the starting of the year would cost USD130 at the setting in of the following year. It (hyperinflation) was to a big extent a common occurrence in the 20th Century. This was mostly after the Great War and the Second World War. The main hyperinflation that has drawn the attention of most scholars for the purposes of studying is that which occurred in Germany in years 1922-1923. In November year 1923, the price index, using August 1922 as the base period, was 1.02*1010. This translated would result to an average of 322% inflation per month. This hyperinflation persisted for about 16 months. Besides the case of Germany, there was an even more serious case of hyperinflation subsequent to the WWII. Precisely, it occurred from August year 1945 through July 1946 and the general price level escalated at an alarming rate of approximately 19,000% per month. Causes of Hyperinflation In spite the fact that hyperinflation can be blamed on the shocks that had just happened just before these two aforementioned countries, no single shock can explain it all in spite of how severe it is. One shock like that of WWII cannot grant a sustainable answer as to why hyperinflation would continuously grow rapidly for a while. In other words the hyperinflationary phenomena witnessed in Hungary and Germany could not have been caused by the world wars. Causes of hyperinflation are explained by one major factor, a rapid increase in the paper money supply. This is usually common after the fiscal and monetary policies’ implementing authorities of a country make regular issuance of huge quantities of money so as to pay a big spending that the government may have incurred. Due to the issuance of currencies by these authorities it leads to a kind of inflation of taxation where government makes gains at the expense of those people who hold money while the value of this money decreases. Therefore, hyperinflation signifies very big schemes of taxation. Explaining this phenomenon of the economy using the economies of Hungary and Germany the findings are as stated. When Hungary was facing hyperinflation, the money supply that was done made a money supply rise of 1.19*1025. On the other hand, in the German case the amount of money in circulation rose by 7.32*109. While compared with the price levels’ rise earlier, the figures of money growth supply were smaller. The difference in the money supply growth and price levels rise can be explained to be due to the concept known as real money quantity. This real money quantity concept seeks to explain what the situation where persons exhibit the behavior of holding money as prices rise in rapid manners shows inflation. The real money quantity, which is also known as the purchasing power of money is that ratio between the money held and the level o f prices. Making an assumption that a given family consumes a given bundle of commodities, the real money value is that bundle which the money that they hold can purchase. In the time periods when inflation is at low levels, then that family will have a retention of the real value of their money that they hold- which is very convenient. On the contrary, if there is a high inflation, a family will be maintaining a

Managing Holistically Essay Example | Topics and Well Written Essays - 3750 words

Managing Holistically - Essay Example The society, therefore, requires the construction companies to effectively maintain sustainability. These companies must be ready to address the complexity of problem conditions through a system and cybernetics approach with the sustainable development as an objective. Here, the problem situation analyzed is of building the Skye Bridge, a road bridge that connects the Isle of Skye with the mainland Highland over Loch Alsh, in Scotland. The project was undertaken by the developer Skye Bridge Ltd. and the construction by the Miller Constructions Company. The construction project intended to meet particular needs like enhancing transportation by connecting the island with the mainland through the Skye Bridge. Non-sustainability was a significant problem context charged against the project. A public inquiry, conducted after the contract, showed that there had been greater public opposition about the ecological and aesthetic elements of the design brought forward by the developer. And so, there occurred the necessity for an amended comprehensive design that could meet all the ecological and aesthetic requirements while being in line with the guidelines set up by Scottish organizations like, the Nature Conservancy, the Scottish Natural Heritage, the National Trust, etc. Ultimately, as Ford et al (1997) pointed out, this modifications to the design cost amounted to about ?4 million; and the total costs could have been reduced if the pubic opinion was sought for much earlier. Moreover, there had been severe criticism about the financial agreements of the project with the Skye Bridge Ltd. Company, especially about the collection of tolls over the years. In the opinion of Ford et al (1997), the initial estimated costs for the construction was around ?24 million, which might be collected through tolls over the agreed period of 27 years. There was much opposition against the high rates of tolls collected by the company from the users. The rate was very cheaper at the begin ning, but gradually developed into the highest bridge tolls in Europe in no time (ibid). McQuaid & Greig (2002) highlight the analysis conducted by the Napier University in 2002 that evaluated the impacts of the Skye Bridge tolls on the region’s economy. The reports showed that the economy faced slow downs and the total loss was around ?4.67 million of income and 256 jobs each year (ibid). As Creig & McQuaid (n.d) point out, even though the bridge enhanced faster crossings, its negative impacts overpowered its positive influences like its impact on tourism and short-stay visitors. Complex Problem Context Construction undertakings, like the Skye Bridge case focus on particular needs, and the challenge of accomplishing such needs varies from technical elements to technological, environmental, ecological, and social elements. The later half of the last century witnessed a notable increase in the degree of sustainable development associated with construction industry, because the society started to realize the adverse impacts of construction projects on the environment and society (Planningcommission.nic.in, n.d). The Skye Bridge Ltd Company was successful in facilitating the particular crossing with the provided specification, but fell short of covering the sustainable devel