“Zimbabwe’s hyperinflation” has become an obsession among the many people opining on money printing. As a result, any increase in money supply (M) will directly result in the price (P) to rise. However, a deeper look into what really happened in Zimbabwe will show the underlying factors at play which caused hyperinflation. In contrast, Zimbabwe used its printed money to fund consumption, through the pensions of its veterans and funding for its war efforts. In conclusion, the underlying conditions of Sri Lanka’s money printing remain vastly different to the conditions obtained in Zimbabwe.

Source: The Nation August 08, 2021 15:56 UTC