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Thursday, March 26, 2009

There is Hope for Zimbabwe

Time to find a new poster child for hyperfinflation. Zimbabwe's economy seems to have turned cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 corner by (1) allowing foreign currency to be used in transactions and (2) abandoning any furcá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r production of Zimbabwe dollars. Here is one news report:
HARARE (AFP) — A man whistles as he picks groceries from cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 shelves of a supermarket in Zimbabwe's capital. Anocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r shopper, spoilt for choice, compares cooking oil bottles while queues form at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 tills.

In Zimbabwe, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365se were simple and almost forgotten luxuries.

For more than a year, supermarket shelves were bare and shops resembled empty warehouses as cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 country reeled under an economic crisis that turned sugar and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 staple corn meal into rare commodities.

Now shops are stocking up again, after cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 government in January agreed to allow retailers to conduct business in foreign currency.

The government has even stopped printing Zimbabwe dollars, which it once churned out in trillion-dollar denominations that quickly became worthless under inflation that independent economists estimated in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 quadrillions.

The switch to foreign currency has already started bringing prices down in US dollar terms, according to official statistics which are being borne out at cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 till.

The BBC also notes that prices are now falling in Zimbabwe and furcá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365r claims cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 following:
The US dollar was adopted by Zimbabwe's government following cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 inauguration of cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 unity government between cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 MDC and President Mugabe's Zanu-PF.
So Zimbabwe has dollarized. This is certainly an improvement in policy, but why not adopt cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 South African Rand? The economies of South Africa and Zimbabwe surely are closely to an optimal currency area than cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 U.S. and Zimbabwe. Does Zimbabwe really want to import U.S. monetary policy? With all that said, this is good start for Zimbabwe.

2 comments:

  1. Greg Mankiw reports cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 same story. I liked his ironic closing comment: "So now it is up to Ben Bernanke to keep Zimbabwe's inflation in check"

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  2. That is a great line. BTW, thanks for cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 conundrum links. I hope to post on it at some point after looking at several papers on it, including cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 one by Cochrane.

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