Saturday, June 16, 2012

Zimbabwe, billions and hyperinflation


In general people from Zimbabwe are a happy people. One reason is the country has no shortage of available money. Money makes many people happy.




However, the people of Zimbabwe occasionally get unhappy when the price of eggs and other food items go up and up and up some more.



One of the main reasons why prices are high and why there are so many happy and unhappy billionaires in Zimbabwe is because of inflation. Hyperinflation to be exact. Poor execution of monetary policy is a root cause (what central bank, they say!).


The moral of the Zimbabwe macroeconomic story is that, at times, money cannot buy you happiness even among a country of billionaires.