[RobertoG]

From what I've read, it seems that the reason for Zimbabwe hyperinflation was an attempt of "forced equality" but in a different way.

As an heritage of colonialism, 1% of the white people owned the 70% of the land, and agriculture was the main product of the economy and the main source of employment.

Mugabe decided to take the land from the whites and give it to their soldiers and mates who had not idea what to do with it. The production fell spectacularly. The following supply shock created the hyperinflation. The "printing" of money was just a consequence.

Edit: just to be clear, I'm not saying that a minority owning most of the land was a good thing. Just trying to explain my understanding of what happened.

[simonh]

Not disagreeing with you, but if it had been handed over to specific people it might have worked, but what happened is anyone and anyone in the local area just went into the farms and took whatever they wanted. No production, no employment on the farms, no taxes or foreign exchange from the produce -> economic collapse.

I worked for a telecoms company back in 2006 and a Zimbabwean cellular network wanted to buy our software. They had the money in an escrow account, but pulled out of the deal before it could complete. It wasn't as bad back then, but that was the year inflation hit 1,000% so it was clear what was happening.

[nerfhammer]

Supply shocks can't cause general or sustained inflation. If farms stop producing anything, that should cause a shortage of farm-originated goods, and the prices of those things should increase. But the prices of other things should not change much; some prices will actually go down as people aren't as willing to pay as much as before.

If the farm workers all aren't getting paid anymore or a lot of loans are cancelled, that should cause deflation, not inflation.

Hyperinflation is always caused by inflationary treasury finance.

[RobertoG]

Well, following your theory, a dollar in the desert have infinite value ;-)

If your only export is farm-originated goods (as it's basically the case of Zimbabwe), that means that you have to import everything else.

That means that you need foreign currency for getting everything that it's not farm-originated goods.

If you stop producing farm-originated goods, the value of your money will drop respect the other currencies and you will need more and more or your currency to buy imports.

But even in a closed economy, less production and the same quantity of money, means, obviously, more expensive prices.

How could be otherwise? After all, you agree that the same production and more money means more expensive prices.