New search
download case
  • Overview
  • Teaching Notes
  • Answer Key
  • Comments/Replies

Hyperinflation

What Zimbabwe Can Teach Us



Co Authors:

Monica E. Hartmann
Economics Department
University of St. Thomas
mehartmann@stthomas.edu

Robert J. Werner
Geography Department
University of St. Thomas
rjwerner@stthomas.edu

Abstract:

This case study uses the Zimbabwean experience with hyperinflation to give students an opportunity to apply a variety of economic concepts to a real world event. The topics include, but are not limited to, scarcity, production possibility frontier, supply and demand, and fiscal and monetary policies. Because the four parts of the case are linked together (they use the same economic scenario), students will carry over and apply the knowledge obtained in one part of the case to the next one. As a result, students see the interrelatedness of the macroeconomic issues and obtain a more comprehensive understanding of the issues and not just looking at one aspect in isolation. The case was designed for an introductory macroeconomics college course, but can be modified for a development or agricultural economics course. Instructors can choose to use all parts of the case or just some of them depending on time constraints and topic interest.

Objectives:
  • Weigh the concepts of unlimited wants with scarcity of resources.
  • Deduce the macroeconomic effects of household budget allocation decisions.
  • Identify the location in which a country is operating on a production possibility frontier based on a given scenario.
  • Identify firms' production decisions in response to government price decrees.
  • Recognize that the government's price decree leads to a movement and not a shift in supply and demand.
  • Identify how price-setting affects prices, supply, and demand.
  • Deduce the short-and long-term implications of price ceilings.
  • Discuss legal and political issues surrounding property rights in Zimbabwe.
  • Identify how the lack of respect for property rights impacts the macroeconomy.
  • Represent the macroeconomic effects using the per worker production function.
  • Recognize that a strong, non-corrupt judicial system is also necessary for economic growth.
  • Identify actions the government can do to alleviate high unemployment.
  • Infer consequences of those actions on inflation.
Keywords: Macroeconomics; production possibility frontier; scarcity; supply and demand; hyperinflation; fiscal and monetary policy; land policies; property rights; Zimbabwe; Africa
Topical Area: Policy issues, Social issues, Social justice issues
Educational Level: Undergraduate lower division, Undergraduate upper division
Formats: PDF
Type/Method: Analysis (Issues), Discussion
Language: English
Subject Headings: Economics  
Date Posted: 4/1/2011
Date Modified: N/A
Copyright: Copyright held by the National Center for Case Study Teaching in Science, University at Buffalo, State University of New York. Please see our usage guidelines, which outline our policy concerning permissible reproduction of this work.

Teaching Notes


Case teaching notes are password-protected and access to them is limited to paid subscribed instructors. To become a paid subscriber, begin the process by registering here.

Teaching notes are intended to help teachers select and adopt a case. They typically include a summary of the case, teaching objectives, information about the intended audience, details about how the case may be taught, and a list of references and resources.

  Download Teaching Notes

Answer Key


Answer keys for the cases in our collection are password-protected and access to them is limited to paid subscribed instructors. To become a paid subscriber, begin the process by registering here.


  Get Answer Key



Name:
Email:
Department:
Institution:
City State:
Comments:
security code
Enter Security Code: