Can you have a currency without trust? My we…

I visited Zimbabwe for the first time recently. For an economist, Zimbabwe is an exciting place to visit as it is sort of an economic basket case. No doubt a lot of factors played a role in the collapse of the Zimbabwean economy that started at the turn of the century, but the role of poor monetary policy was central. Faced with significant fiscal deficits and an inability to tap international financial markets for debt, the government and the Zimbabwean central bank resorted to printing money. The consequence was spiraling hyperinflation, a collapsed economy, and an eventual abandonment of the Zimbabwean dollar in 2009.

Read →

Loading…