Hyperinflation

in Zimbabwe

Grade X
 2000-2007 hyperinflation
inflation rates as great as 25,000 %
2008 1 egg = ZW$50 billion (US32 )

Lottery would pay ZW$1.2 quadrillion (1.2 x 1015)

 Reserve bank of zimbabwe

Can you become a rich person ?

Every Zimbabwean is
billionaire..
4 redenominations / price controls
 2000-2007
Agricultural production falls 51%
Industrial Production 47%
GDP falls 40%
Money Supply increases by more than 500B %
(2008 estimate)
94% unemployment
Election Fraud
Human Rights abuses
Redistribution of farmland
 Now
Legalized foreign currency transactions
2008/9
Zimbabwe has no currency; uses dollars,
rands, other currencies.
Government of Unity (new power-sharing
coalition)
 Bellringer 4/20/2009
1. How would you describe the economy of
Uruguay from 1998-2004?
Uruguay GDP
(in Billions)
40
35
30
25
20
15
10
5
0
01
98

99

00

02

03

04

05

06

07
20
19

19

20

20

20

20

20

20

20
 2005 Comparison
Uruguay's GDP: $30.66 billion

Spains GDP: $1.83 trillion

United States GDP: $12.36 trillion

Factors: population, resources, education,

crime
 Zimbabwe
Population:
13 million
GDP: 4.72 billion
GDP/Capita:
$402
Unemployment:
66%
 the President of Zimbabwe on how to improve the
economy of his country.
Situation: Many blacks can not afford goods and food in
the markets. Business owners are allowed to charge
whatever price they want and since food is hard to find,
its very expensive.
Local Zimbabwe businesses have a difficult time
competing with imports from the USA, South Africa and
England. When Zimbabwe businesses fail, people lose
their jobs causing more unemployment.

98% of the farm land is owned by white farmers, which

was taken in the 1800s from native Africans. 90% of
this country is black and has no access to this farm land.
The white farmers pay low wages and often do not hire
native blacks.
 Zimbabwe 1990s
Govt
Problem solution EFFECT
High food Fixed prices Shortages
prices
Competition from
USA & SA Banned More shortages
imports
Blacks have Redistributed Still more
no land land shortages
President Robert
Mugabe
Not enough Printed up inflation
money more money

Technically hyperinflation
 What if I told you?
Million dollars?
25 Billion dollars?
100 Billion dollars

Fiat currency = value

only because we think
it does
 Inflation
Rise in prices
over time
cost of
living
The real
value of
currency
Why cant we just print more money?
Quantity theory of
inflation

Piles of currency in Zimbabwe

 What else causes inflation?
Cost push theory- when
producer costs increase,
producers raise their prices.
For example, increase the cost
of gasoline causes and increase
in the price of food.

Demand pull theory

When consumers demand
increases producers will
generally increase prices. For
example: fads or hot xmas toys
 Third World
Draw 3 comics showing each of the
theories behind inflation