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by imtringued
1994 days ago
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Hyper inflation is the result of exhausting your countries' production capacity. This is generally a temporary phenomenon because the supply side can always eventually catch up because the demand side is funding it. In economies where it is a permanent problem it is because either the economy is prevented from expanding production (think of preventing new housing in San Francisco or excessively low unemployment) or because there is too much demand for products (generally through printing more money despite the low unemployment or debt). Well, if we assume that your country is unable to introduce more money into the economy through no fault of its own (well that's never true) you can still fix the problem by investing into more production capacity and education. The unemployment in Zimbabwe is relatively low at around 5% so any additional money it prints will turn into inflation. If you were to follow MMT you would stop introducing more money because that is the core argument in MMT: print until inflation is back on track. Inflation is already on track in Zimbabwe. The thing is, once you are in this situation you are almost set up to fall into the pit of success. All you need to do is invest into businesses, expand production capacity through automation and also invest into education. Follow the Chinese model by creating special economic zones where foreign investors can easily do business. Follow the German model of vocational training to solve the education problem. These problems are far less intractable than what first world countries are suffering through. |
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