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cgod  ·  3498 days ago  ·  link  ·    ·  parent  ·  post: Zimbabwe offers new exchange rate: $1 for 35,000,000,000,000,000 old dollars

I'm guess that inflation in Zimbabwe is more a function of the quantity of money and a shortage of goods, mostly food, caused by the collapse of agriculture. I'd guess that the psychological effect is more of a side show. Of course psychology has to factor in, people are constantly trying to predict the value of the their currency and that is the basis for which they have to make all economic decisions. With the government constantly flooding the market with money and where the competition to quickly spend your money before it becomes worth less in an a relatively low output economy (agriculture is devestated, few imports because no one wants to hold the native currency) prices drive up inflation even more than volume of money.

Milton Friedman's Money Mischief is a great book about the value of money through history. You can skip the mathy bits, enjoy the yarn and learn a great deal.

Somalia had no inflation for a decade of war, which is almost unheard of. The central government had collapsed and no money was printed and out put stayed steady as the government wasn't having a lot to do with output to begin with (large informal sector).