Case Study - Zimbabwe

alt money fund

Readers Question: If inflation is too much money, too few goods then how come…..Zimbabwe has the world’s highest inflation rate, at more than 100,000%, and just one adult in five is believed to have a regular job? With no job, no money so no demand so…why inflation?

A likely explanation for the situation in Zimbabwe could be the government printing money in response to a shortage of output, and thereby increasing the money supply much faster than Real GDP.

A few years ago, national debt in Zimbabwe increased to over 100% of GDP. To finance the National Debt, the Government started printing money; but, this only devalued the value of existing money and caused prices to rise.

The inflation is also exacerbated by a shortage of supply. Because basic goods are in short supply it is easy for market prices to be increased causing a spiral effect of upwardly rising prices.

Ironically, this shortage of supply has been made worse by the imposition of price controls. These fix prices for basic goods. But, because the cost of production has been increasing faster than prices, suppliers have little incentive to supply (at least to official channels). This makes the shortage worse and therefore the likelihood of inflation stronger.

  • Note: I think that there is ‘weak demand’ rather than ‘no demand’ Some people still have the ability to buy goods; the problem is that the supply of goods is still less than the very ‘weak’ demand.

  • Also, the thing here is that there is little ‘effective demand’. i.e. people want to purchase goods, they just don’t have the necessary income to be able to do it. Leading to tragic consequences such as Funeral Costs soar

Inflation Rates in Zimbabwe

  • 2005 – 585.84%

  • 2006 – 1,281.11%

  • 2007 – 66,212.3%

  • 2008 – 231,150,888.87%

Causes of Inflation MV=PY

The Monetarist explanation of inflation is that prices are linked to growth in the Money Supply. The quantity theory of Money states MV=PY. If we assume a constant V (velocity of circulation) and Constant Y, an increase in the Money supply leads to an increase in prices. In practise, the link between the money supply and inflation is not as simplistic as this formula states; but, as a rough rule of thumb if the money supply increases by 1000% and Real GDP stays the same you can expect inflation of around 1000%

Mugabe’s Explanation of Inflation

I believe Mugabe once blamed inflation on ‘Greedy businesses’ demanding price rises. This encouraged him to set up price controls. But, as mentioned these have been ineffective in preventing inflation.

Other Mugabe supporters have tried to blame the inflation as a ‘Western Import’. Although this assertion is rather bizarre given that inflation is relatively low in Western economies.

Hyperinflation and Exchange Rate


Hyperinflation causes a rapid decline in the value of a currency. This graph shows how inflation in Zimbabwe led to a steep decline in the value of the Zimbabwe currency.

Question related to hyperinflation in Zimbabwe

Readers Question: I do not understand the responses. If prices are rising by 1000% and unemployment is 80% then WHO is buying the goods? It cannot be the people unemployed as they would not have the money. If the answer is ‘no-one is buying the goods, hence starvation’ then why would prices be so high as if there’s no demand….

Usually in the West, inflation is caused during periods of rapid growth; it is termed demand pull inflation. However, this particular case of inflation is not caused by an economic boom, but, a collapse in the economy where the money supply is growing despite a fall in output and number of goods available.

Although unemployment is close to 80%, there are still people with money. There are many groups of workers who have rising nominal wages because the government is printing more money, but, because the output of goods is falling, the value of money is decreasing rapidly.

Basically, even if only a small % of the population has any money that is sufficient to cause inflation, if the output is falling. The real problem is that many people have more cash / money, but have declining real incomes.

Because there is a shortage of goods and the printing of more money it is inevitable that inflation occurs.

Note printing money does nothing to increase Real output, Real GDP. It is a basic economic paradox that you can’t get richer by printing more money. But, it doesn’t stop people in desperate situations trying.



Consider your presentation as the maker of the shape, and afterward the accompanying sections making up each side. The ideal essay gives a reasonable exchange of the two sides of the story, building up an adjusted contention all through, and with a conclusion that weighs up the proof you've secured and maybe gives your own particular astute feeling on how the theme ought to be deciphered in view of the confirmation secured. They wander outwards when called to, yet never desert the wellbeing of the development altogether. It is a procedure of steady realignment, keeping up the square at all cost. As far as "writing," you require just to make a modest bunch of unique sentences for the whole essay as best custom essay writing service do: a postulation, a topic, a little proposition that starts each section and a closing sentence that says what everything implies. Everything else is a variety of these four sentences somehow.

In reply to by elizabethrboatright

Case Study a complete learning of a group or persons, specifically as a model of medical, psychiatric, psychological, or social phenomena.MY Essay Writing Link The case study is one of mostly ways of performance social science research. Match wasted and perceived validity in the humanities, natural sciences, social sciences, pseudoscience and business. Illustrative case studies define a domain.



You have posted very informative article about currency. I like reading the content you have posted found it very informative and good to read. I have visited many websites but unable to find such quality content.

wedding cards printing services

In reply to by selfie

I am always searching online for articles that can help me. There is obviously a lot to know about this. I think you made some good points in Features also. Keep working, great job ! sub sanwiches

In reply to by S E O Experts

Effectively, the article is really the best point on this registry related issue. I fit in with your decisions and will energetically anticipate your next updates.  토토사이트

Just unadulterated magnificence from you here. I have never expected something not as much as this from you and you have not baffled me by any extend of the creative energy. I accept you will keep the quality work going on.  rencontre

In reply to by S E O Experts

I feel extremely upbeat to have seen your website page and anticipate such a significant number of all the more engaging circumstances perusing here. Much obliged yet again for every one of the subtle elements.  Ice Cream Bakeries Maryland

In reply to by S E O Experts

Welcome to your one stop shop for casino site information online. The aim of this site is to recommend the best of the best of internet casino sites, to help you make an informed decision about which casino site you should play at. If you are keen to play right away, choose from one of our top 10 safe and reliable online casinos sites listed in the table above. 코인카지노

In reply to by S E O Experts

Super site! I am Loving it!! Will return again, Im taking your sustenance moreover, Thanks.  bk8

In reply to by S E O Experts

If you own Native Instruments’ Kontakt 5 sampler, you probably tried many interesting free Kontakt libraries with mixed results. We recently looked back and checked which are the best free Kontakt libraries 2019 in our arsenals. These aren’t necessarily any better than expensive commercial Kontakt libraries, but for free they offer serious bang for your buck and they still have been used plenty in my recent productions. best kontakt libraries 2019

I was just browsing through the internet looking for some information and came across your blog. I am impressed by the information that you have on this blog. It shows how well you understand this subject. Bookmarked this page, will come back for more. 바카라사이트

Today, SRSG has emerged as one of the leading full-service player offering an array of products and services for system integration, broadcast consultancy, IT infrastructure services, maintenance services and digital archiving services for the broadcast industry.
Apple authorized service center delhi
Apple product reseller in Kolkata
Apple iphone 7 dealers in delhi
Media office interiors
ipad dealers in Guwahati
Mac pro service center in Delhi

In reply to by selfie

This site is a poker game that is popular only in Korea. It is a fast game where the game is determined in a minute. Koreans are enjoying this poker game frequently. All four cards are different and the lower the number, the more victory it is. 바둑이사이트

Metode bisnis secara online menawarkan kebebasan waktu bagi para pelakunya. Anda tak akan terikat oleh waktu dan bisa bebas mengatur jadwal sesuka Anda. Bandingkan dengan jualan offline di daratan yang semua serba kaku serta harus selalu berada di tempat usaha. Hal ini sekaligus menjadi kelemahan dari bisnis offline bila dibandingkan dengan onlineDistributor plat besi hitam Distributor plat besi hitam undangan pernikahan bentuk tas Distributor plat kapal besi baja Agen besi beton interworld steel is undangan pernikahan modern Toko Plat Bordes Kembang Distributor Pipa Besi baja Schedule Sch 40 Distributor besi cnp baja jasa konstruksi baja Harga plat besi hitam Harga plat besi hitam undangan pernikahan simple undangan pernikahan biru Harga plat kapal besi baja Agen besi beton gunung garuda undangan pernikahan biasa jual laptop asus jual laptop asus jual laptop asus murah jual laptop asus murah Toko Plat Besi Hitam Supplier Pipa Besi baja Schedule Sch 40 Harga besi cnp baja Jual plat besi hitam Jual plat besi hitam undangan pernikahan biasa Jual plat kapal besi baja Agen besi beton delcoprima undangan pernikahan bahasa inggris islam Toko Plat Kapal Bki Krakatau Steel Agen Pipa Besi baja Schedule Sch 40 Jual besi cnp baja Supplier plat besi hitam Supplier plat besi hitam undangan pernikahan bagus Supplier plat kapal besi baja Agen besi beton cakra steel cs undangan pernikahan cantik elegan Toko Jual Besi Siku Baja Toko Pipa Besi baja Schedule Sch 40 Supplier besi cnp baja Toko plat besi hitam Toko plat besi hitam undangan pernikahan bermanfaat Toko plat kapal besi baja Agen besi beton bjku undangan pernikahan akrilik Toko Besi Unp Baja Profil Kanal Jual Pipa Besi baja Schedule Sch 40 undangan pernikahan undangan pernikahan amplop surat Toko besi cnp baja Supplier besi beton Sni Ulir Polos polos ulir Agen plat besi hitam Agen plat besi hitam undangan pernikahan akrilik Agen plat kapal besi baja Agen besi beton Sni Ulir Polos undangan pernikahan bentuk dompet Toko Besi Cnp Profil Baja Gording Harga Pipa Besi baja Schedule Sch 40 Agen besi cnp baja Supplier besi beton sii Pabrik plat besi hitam Pabrik plat besi hitam undangan pernikahan anti mainstream Pabrik plat kapal besi baja Agen besi beton ais undangan pernikahan coklat Toko Besi Hollow Pabrik Pipa Besi baja Schedule Sch 40 Pabrik besi cnp baja Supplier besi beton psi Ulir Polos Distributor plat kapal besi baja Distributor plat kapal besi baja undangan pernikahan klub bola Distributor besi siku baja Agen besi beton undangan pernikahan kalender Toko Wiremesh Distributor Pipa Besi baja Schedule sch 80 Distributor besi unp baja Supplier besi beton perwira Harga plat kapal besi baja Harga plat kapal besi baja undangan pernikahan cetak Harga besi siku baja undangan pernikahan modern undangan pernikahan online jasa konstruksi baja undangan pernikahan coklat Toko Besi Pipa Baja Schedule 80 Supplier Pipa Besi baja Schedule sch 80 Harga besi unp baja Supplier besi beton PAS Jual plat kapal besi baja Jual plat kapal besi baja Agen stainless steel Jual besi siku baja undangan pernikahan arab Toko Besi Pipa Baja Schedule 40 Agen Pipa Besi baja Schedule sch 80 Jual besi unp baja Supplier besi beton master steel ms Supplier plat kapal besi baja Supplier plat kapal besi baja Agen atap spandek Supplier besi siku baja undangan pernikahan kalender Toko Pipa Besi Hitam Medium Toko Pipa Besi baja Schedule sch 80 Supplier besi unp baja Supplier besi beton ksty Toko plat kapal besi baja Toko plat kapal besi baja Agen baja ringan Toko besi siku baja undangan pernikahan custom Toko Besi Wf Jual Pipa Besi baja Schedule sch 80 Toko besi unp baja Supplier besi beton krakatau steel Agen plat kapal besi baja Agen plat kapal besi baja Agen bondek Agen besi siku baja Toko besi beton Sni Ulir Polos polos ulir undangan pernikahan klasik Toko Besi H beam Harga Pipa Besi baja Schedule sch 80 Agen besi unp baja Supplier besi beton jcac Pabrik plat kapal besi baja Pabrik plat kapal besi baja Agen Plat kapal besi baja bki krakatau steel Pabrik besi siku baja Toko besi beton sii undangan pernikahan batik Toko Besi Beton Pabrik Pipa Besi baja Schedule sch 80 Pabrik besi unp baja Supplier besi beton interworld steel is Distributor besi siku baja Distributor besi siku baja Agen besi siku Distributor besi wf Agen besi Wf Baja undangan pernikahan Distributor Pipa Besi baja Distributor besi h beam baja Supplier besi beton gunung garuda link9

In reply to by Galang

I found Hubwit as a transparent s ite, a social hub which is a conglomerate of Buyers and Sellers who are ready to offer online digital consultancy at decent cost. 안전공원

I really like your blog.. very nice colors & theme.

Did you make this website yourself or ddid you hire someone to doo

it for you? Plz answer back as I'm looking to create my own blog and would like too

know where u got this from. cheers

Feel free to surf to my site;

In reply to by pioneerseo

d’Vine Wine Tours is a new and exciting tour company that was launched in Winter 2013. Ewen and Breana Lawrie are the proud team behind the opening of this fresh, youthful and crisp take on the wine tourism industry. Both born and bred in Perth, they fell in love with Western Australia’s lush South West region swan valley


In reply to by pioneerseo

I feel particularly appreciative that I read this. It is especially useful and to an extraordinary degree significant and I incredibly took in an unfathomable course of action from it.  그래프사이트

In reply to by pioneerseo

Ideal for celebrations, events and tours, what better way to travel in style than in your very own Perth party bus. Whatever the occasion, Bust-A-Move is your sophisticated solution to transporting you and your guests safely to your desired destination, all whilst having fun with your guests in a fully decked out party bus. PARTY BUS PERTH

This is a great article, Given such a great amount of information in it, These kind of articles keeps the clients enthusiasm for the site, and continue sharing more ... good fortunes. letou

With a faith based advisor plus pastor, Jeric Soriano, At this time a usual position appearing as part of Pacquiao's nike factory outlet entire lives beats headphones seminole florida along with also the Philippes,It's tough normally, Just oplagt set it up. Your boyfriend filled me with a perception and an understanding, Pacquiao claims.Even so Pacquiao supports a bunch of subdued nike factory store social thoughts, Your nike outlet guy boasts scarves to finally modern nike factory store national people in politics, For example the state of reebok classic nevada Sen. Harry Reid.


Colourings remain such a significant part of print, kate spade outlet And need to be the last help possessing a customized name. Might considered the look, A few message whenever, Well just do it-- attentively buy a color choice any displays your key ideals of businesses, As well as the put beats headphones on sale it Adidas Superstar on to the emblem. This could be the most pleasing percentage, Yet, adidas outlet be particularly efficiently with ones own design array, And then try to look at only limited nike outlet shapes and designs that's good for you well mutually and as well red bottom shoes as marketing, reebok shoes


I conclusively notice that I'm reputed as a painter unlike it had been seriously an era where I thought desire cheap beats by dre I is not. I built encountering normally. In case Rakim ok, i nike outlet will complete throughout your man's puma shoes pair, And i moncler jacket am vocal great vocals and she is the word what that will saying, I'm just not unsimilar to that of, 'Woah.-- on tomorrow, I may have prevented rapping and also beats headphones on sale has performed for supermarkets for a long time.


Volumptuous, As an example, Considered that a manufacturing area prepared personal effectively up and cheap jordan shoes down way folks everywhere stood, Based on a novel associated this adult ed demonstrate. beats by dre on sale Started appearing as part of 1927, Fuller's renowned Dymaxion company was ever eradicating appearance like merchandise of the cutter jordan 11 age group ranges, Might be easily constructed as well as delivered at red bottom shoes types, With the low slung aluminium domed rooftop nike outlet of dangled from a stainless-steel swagger.


Properly, Fighter, So i'm making use of great fashionable technology faraway brought on by footwear as to food. Take them into consideration. I'm so kind of handing over respect to what is this great segment if we do magazine proceeding in a back corner. In males uncork increases, Not nike factory outlet a. 1 plant seed-stock Derek Drabble coupled with Tateishi Skyler beaten number. 2 plant cheap nike shoes seed-stock trent Kovacevich and as jordans for sale a result Steven Walters, 6 3, 6 4,


South nike outlet america also ontario red bottom heels are good christian louboutin shoes invests red bottom shoes in, Due to their natural strategies lower part. A iShares MSCI brazilian index chart[EWZ] Tracks south america, As well as iShares MSCI the us index chart[EWC] Decent Michael Kors Outlet bet towards ontario. I won't get yourself a dvd ETFs for cheap beats by dre the residual 5% or jordans for sale 10% benefit to the present move, And yet traders what person are the nike outlet owner of mont blanc pens the nike factory outlet company might vehicle obtainable before passes across S 1200.


Really your primary correctly the particular paradox the game eliminates us all. mont blanc pen Does it include politics committing under armour outlet destruction the only reason why people are under armour shoes created interior consider that producing areas illegally reproduced is effective is moncler outlet simply because of the diet with regards to music tripe they will be given. The wretched component is that men cease adidas store to nike store live from all of these what is known as legal heights, Which generally practitioners ect get very jordans for sale small knowing of, However they have loads of explained to know-how under armour outlet about computers crack hashish and so forth that would mean comfortable law and a lot risk-free modern community. Illegality means bad guys earn money out of further development to finance other stuff. Is this politics puma outlet committing destruction alalthough only reason why people are beats by dre on sale established from inside the scene that nike outlet creating methods prohibited operates is to its diet because pointing red bottom shoes to multigrowing new video tripe may perhaps beats headphones on sale be nike outlet provided. The pathetic issue is cheap jerseys that adidas stan smith burn out out there what are cheap nike shoes named as legal altitudes, adidas outlet Which unfortunately health-related ect bring hardly any clues about, However they have loads of educated is critical to get drug pot for example might mean a snap rule and an extremely steadier their communities.

Easily, the article is actually the best topic on this registry related issue. I fit in with your conclusions and will eagerly look forward to your next updates.   Obsession Phrases

I just couldn't leave your website before telling you that I truly enjoyed the top quality info you present to your visitors? Will be back again frequently to check up on new posts.  His Secret Obsession

The worst part of it was that the software only worked intermittently and the data was not accurate. You obviously canot confront anyone about what you have discovered if the information is not right.   His Secret Obsession

I love the way you write and share your niche! Very interesting and different! Keep it coming!   Cassava