Your assignment is to prepare and submit a paper on inflation in zimbabwe. These are permanent dollarization, joining the Common Monetary Area membership, usage of its dollar as the only legal tender and employment of variable regimes. However, in its conclusion and recommendation, the brief singles out joining of the CMA as the best choice for Zimbabwe to permanently curb its inflation. Situation brief When Zimbabwe attained independence in 1980, its dollar’s worth averaged $1.25 (Kramarenko et al. 2010). Over time, inflation rose steadily under the presidency of Robert Mugabe until towards the end of the 1990s when the confiscation of land from White settlers had negatively affected food production (Coomer &. Gstraunthaler 2011). With the seizing of these commercial farms, foreign investors fled away leading to halting of manufacturing and reducing the supply of foreign currency needed for importation of goods. Tax revenue also reduced drastically. In order to ensure that the government funded its debts, the Reserve Bank of Zimbabwe increased its printing of currency causing a rise in inflation to triple digits as of 2001.
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