Hyperinflation: what causes it, how to prevent it & how to stop it - EP158

What causes hyperinflation and how can it be avoided in the first place or stopped if it occurs? What characterizes countries which fall victim to hyperinflation? A conversation between show host Gene Tunny and his colleague Arturo Espinoza which explores the economic theory and evidence around hyperinflation, and discusses peculiarities which can arise in hyperinflation-afflicted economies - e.g. pensions denominated in cows in Zimbabwe. Please get in touch with any questions, comments and suggestions by emailing us at [email protected] or sending a voice message via https://www.speakpipe.com/economicsexplored. Links relevant to the conversation Current inflation rates around the world: https://tradingeconomics.com/country-list/inflation-rate?continent=world What is hyperinflation and should we be worried? (WEF article from June 2022): https://www.weforum.org/agenda/2022/06/hyperinflation-inflation-interest-rate/ Wikipedia entry for former Peruvian President Alberto Fujimori https://en.wikipedia.org/wiki/Alberto_Fujimori Why a Zimbabwean firm offers pensions denominated in cows | The Economist https://www.economist.com/middle-east-and-africa/2022/05/14/why-a-zimbabwean-firm-offers-pensions-denominated-in-cows The Modern Hyperinflation Cycle: Some New Empirical Regularities (IMF Working paper from 2018): https://www.imf.org/en/Publications/WP/Issues/2018/12/07/The-Modern-Hyperinflation-Cycle-Some-New-Empirical-Regularities-46368 Chris Edmond’s note on Cagan’s model of hyperinflation: https://pages.stern.nyu.edu/~cedmond/ge07pt/notes_cagan.pdf Alberto Alesina and Lawrence H. Summers’ paper Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence: https://www.jstor.org/stable/2077833 Bitcoin Could Solve Zimbabwe’s Hyperinflation Problem—Instead, The Country Is Telling Impoverished Citizens To ‘Just Buy Gold’ (Forbes article): https://www.forbes.com/sites/martinrivers/2022/07/27/bitcoin-could-solve-zimbabwes-hyperinflation-problem--instead-the-country-is-telling-impoverished-citizens-to-just-buy-gold/?sh=179b8f8b66d2 Inflation is spiking in Zimbabwe (again). Why high interest rates aren’t the answer (Conversation article by Jonathan Munemo): https://theconversation.com/inflation-is-spiking-in-zimbabwe-again-why-high-interest-rates-arent-the-answer-187362 Credits Thanks to Josh Crotts for mixing the episode and to the show’s sponsor, Gene’s consultancy business www.adepteconomics.com.au. Please consider signing up to receive our email updates and to access our e-book Top Ten Insights from Economics at www.economicsexplored.com. Economics Explored is available via Apple Podcasts, Google Podcast, and other podcasting platforms.