Abstract
In this book, we look at the case of hyperinflation in Zimbabwe, showing how a number of decisions made by the government initiated the episode of hyperinflation between 2006 and 2008. Through using a new price series dataset, we show that the money base expanded considerably from 2000, in parallel with growing budget deficits. The mechanisms to address hyperinflation are clear. Stabilisation programmes play a central role, especially the anchoring of inflation expectations through credible monetary policy. In the case of Zimbabwe, while a change in regime was initiated, it was only partially followed though. As a result, Zimbabwe in 2019 is again in a precarious situation. There is a need to re-invigorate these reforms, including increasing tax revenues and containing expenditure, in order to avoid a recurrence of hyperinflation.
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Notes
- 1.
Dated using the newly created CER price series.
- 2.
References
IMF. 2010. Zimbabwe: 2010 Article IV Consultation—Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Zimbabwe. IMF Country Report No. 10/186, Washington, DC.
———. 2017. 2017 Article IV Consultation—Press Release; Staff Report; and Statement by the Executive Director for Zimbabwe. IMF Country Report No. 17/196, Washington, DC.
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McIndoe-Calder, T., Bedi, T., Mercado, R. (2019). Conclusion. In: Hyperinflation in Zimbabwe. Palgrave Pivot, Cham. https://doi.org/10.1007/978-3-030-31015-8_8
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DOI: https://doi.org/10.1007/978-3-030-31015-8_8
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Publisher Name: Palgrave Pivot, Cham
Print ISBN: 978-3-030-31014-1
Online ISBN: 978-3-030-31015-8
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