Economics for Business Day 18 – Hyperinflation Definition Dr. Andrew L. H. Parkes “Practical Understanding for use in Business” 卜安吉

March 2, 2012BECO II, Day 182 Hyperinflation The definition: over 50% inflation PER MONTH The definition: over 50% inflation PER MONTH An example of a country exhibiting hyperinflation and the approximate rate. An example of a country exhibiting hyperinflation and the approximate rate. Where does it come from? Where does it come from? Using money to pay for Government Spending Using money to pay for Government Spending (Called “Monetizing the Debt”) (Called “Monetizing the Debt”)

March 2, 2012BECO II, Day 183Hyperinflation Yugoslavia – last decade’s example Yugoslavia – last decade’s example Zimbabwe – the current example (NY Times) Zimbabwe – the current example (NY Times)

March 2, 2012BECO II, Day 184Hyperinflation How bad is inflation in Zimbabwe? Well, consider this: at a supermarket near the center of this tatterdemalion capital, toilet paper costs $417. How bad is inflation in Zimbabwe? Well, consider this: at a supermarket near the center of this tatterdemalion capital, toilet paper costs $417. No, not per roll. Four hundred seventeen Zimbabwean dollars is the value of a single two- ply sheet. A roll costs $145,750 — in American currency, about 69 cents. No, not per roll. Four hundred seventeen Zimbabwean dollars is the value of a single two- ply sheet. A roll costs $145,750 — in American currency, about 69 cents. The price of toilet paper, like everything else here, soars almost daily, spawning jokes about an impending better use for Zimbabwe's $500 bill, now the smallest in circulation. (Summer 2008) The price of toilet paper, like everything else here, soars almost daily, spawning jokes about an impending better use for Zimbabwe's $500 bill, now the smallest in circulation. (Summer 2008)

March 2, 2012BECO II, Day 185Hyperinflation From Greg Mankiw’s Blog: From Greg Mankiw’s Blog: “The trigger of this crisis — hyperinflation — reached an annual rate of 1,281 percent this month, and has been near or over 1,000 percent since last April. Hyperinflation has bankrupted the government, left 8 in 10 citizens destitute and decimated the country’s factories and farms.” “The trigger of this crisis — hyperinflation — reached an annual rate of 1,281 percent this month, and has been near or over 1,000 percent since last April. Hyperinflation has bankrupted the government, left 8 in 10 citizens destitute and decimated the country’s factories and farms.”