The Vol. 14 | NO. 3 | 311–346 QUAR T ERLY FAll 2011 JOURNAL of AUS T RIAN EC ONOMI C S THE HYPERINFLA T ION IN ZIMBABWE JAYSON COOMER AND THOMAS GS T RAUN T HALER ABSTRACT: Zimbabwe’s economic crisis originates from its struggle for independence in the 1970s. Military adventures and reckless spending led to exploding budget deficits, and the forced seizure of commercial farms almost brought the agricultural production to a halt. Zimbabwe entered into a state of hyperinflation, which culminated in a de facto dollarization of the Zimbabwean economy, made official in early 2009 by the Minister of Finance. Given all the hyperinflations of the past, the question to ask is whether the Zimbabwean experience is an isolated economic novelty; or is rather a repetition of the economic and political follies that have plagued some of the fiat governments of the modern world. This paper provides a detailed historical account of the economic crisis, which we will subsequently compare to other past hyperinflations, first and foremost to Mises’s account of the Hyperinflation in Germany of 1920-1923. KEYWORDS: hyperinflation, inflation, Zimbabwe, monetary policy, fiscal policy JEL CLASSIFICATION: E31, E51, H63, N87 Jayson Coomer is a post-graduate student at the University of Cape Town, South Africa. Dr. Thomas Gstraunthaler (
[email protected]) is an adjunct professor at the University of Cape Town, South Africa. 311 312 The Quarterly Journal of Austrian Economics 14, No. 3 (2011) They had learned then how easy it is to issue it; how difficult