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Working papers issued in 2011

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Working papers issued in 2011

Globalization and Monetary Policy Institute2011 Annual Report, Federal Reserve Bank of DallasI Globalizationof Globalization: A JointEquilibrium Model

Working papers issued in 2011 ling:Introduced 1112011map Kunyu Wanguore Bank of Dallas. February 2012. & condition that the source is to the Globalization and Mon-eserve Bank of Da

llas, P.O. Box . This publication is available onLetter from the PresidentWith the public finances of so many countries in a parlous state, central ha Working papers issued in 2011

nk independence has never been more important, ensuring that central bankers are able to deliver on (heir mandates. Ihe li'dcral Reserve Bank of Dalla

Working papers issued in 2011

s' (flobalization and Monetary Policy Institute annual report for 2(111 contains two articles (hat illustrate how crucial central bank independence is

Globalization and Monetary Policy Institute2011 Annual Report, Federal Reserve Bank of DallasI Globalizationof Globalization: A JointEquilibrium Model

Working papers issued in 2011 entury. It is a sad tale of how political pressure Io monetize unsustainable government spending can be (he undoing of a country and reverse decades o

f economic devel opincni. Ih<* second article, by Mark Wy line and Ed Skelton, looks at Mexico's experience liver the past two decades and makes for h Working papers issued in 2011

appier reading Il shows that by embracing sound central Ixuikiiig practice—specifically, by enshrining the ind(*|x*n-dence of the Banco de México in t

Working papers issued in 2011

he Mexican con stitulion and adopting inflation targeting Mexico was able III end the vicious cycle of financial instability that had plagued II from

Globalization and Monetary Policy Institute2011 Annual Report, Federal Reserve Bank of DallasI Globalizationof Globalization: A JointEquilibrium Model

Working papers issued in 2011 was.Ihe report also contains an article by Christian Winge on the factors that drive popular support for free trade and open borders, l ew things mak

e It harder to sustain political support for open markets than economic distress and uncertainty, making It all the more important (hat we return Io v Working papers issued in 2011

igorous growth and low unemployment.2011 was another good year for ourglobal-ization research program lhe institute issued the lOOlh working paper in

Working papers issued in 2011

a dedicated scries dating back to 2007 and also hosted its inaugural public lecture, delivered by Jiitgen Stark, then chief economist of the lũiro|x*a

Globalization and Monetary Policy Institute2011 Annual Report, Federal Reserve Bank of DallasI Globalizationof Globalization: A JointEquilibrium Model

Working papers issued in 2011 he iui|Mirlatice of conducting monetary policy w ilh an eye toward medium term price stability and the critical role central bank independence plays i

n ensuring such an outcome.Central bank independence has never been more important ensuring that central bankers are able to deliver on their mandates Working papers issued in 2011

.Richard w. FisherI'n-iuk-ntandC.EOMfial RaertKi Raai of Dallas......ỊFt Of MLMSE RVE BANK OF 0 At LẠS •Hyperinflation in Zimbabwe100000000000000 RESE

Working papers issued in 2011

RVE BANK OF ZIMBABWE»0000000000000WO 000 000 000 000A AO321 235The historic Zimbabwean $1 co trillion bill is new 3 novelty itemcountries. Zimbabwe, o

Globalization and Monetary Policy Institute2011 Annual Report, Federal Reserve Bank of DallasI Globalizationof Globalization: A JointEquilibrium Model

Working papers issued in 2011 (lined to emigrate. Ihe country's experience shows how a relatively self-sustaining nation at independence fell victim to out-of-control inflation an

d the severe erosion of wealth.'Ihe causes of Zimbabwe's hyperinflation, its effects and how it was stopped are particulariy instructive.In his semina Working papers issued in 2011

l work I’hillip (Zagpn defined hyperinflation as lieginning when monthly inflation rates initially exceed 50 pen. ent It ends in the month before tlx-

Working papers issued in 2011

rate declines below 50 percent, where II must remain lor al least a y ear (('.agan 1966). Zim-One hundred trillion dollars—that's100.000.000;XM).000-

Globalization and Monetary Policy Institute2011 Annual Report, Federal Reserve Bank of DallasI Globalizationof Globalization: A JointEquilibrium Model

Working papers issued in 2011 of ever higher denominations distributed as inflation eroded purchasing power. When Zimbabwe attained independence in 1980, ZS2.ZS5. zs 10 and ZS20 d

enominations circulated, replaced three decades later by bills in the thousands and ultimately in the millions and trillions as the government sought Working papers issued in 2011

to prop up a weakening economy amid spiraling inflationShortly after the ZSIOO trillion note began circulating, the Zimbabwean dollar was officially a

Working papers issued in 2011

bandoned in favor ol foreign currencies From 2007 to 2008, the local legal tender lost more than 99.9 percent of its value (I lanke 2008). Ihis marked

Globalization and Monetary Policy Institute2011 Annual Report, Federal Reserve Bank of DallasI Globalizationof Globalization: A JointEquilibrium Model

Working papers issued in 2011 It the first—and so far only —country in the 21 st century tn experience a hyperinflation-ary episode. I lyperinflation devastates people andIwbwv ent

ered the hypcrinflationary era in March 2007; the period ended when the nation abandoned its currency in2009(ƠMỉrt f).'lhe evolution of the Zimbabwean Working papers issued in 2011

dollar in the post-independence period is shown in the timeline on page 10.Bouts of hyperinflation are mostly accompanied by rapidly increasing money

Working papers issued in 2011

supply needed tn finance large fiscal deficits arising from war, revolution, the end of empires and the establishment of new states. I ly perinflatio

Globalization and Monetary Policy Institute2011 Annual Report, Federal Reserve Bank of DallasI Globalizationof Globalization: A JointEquilibrium Model

Working papers issued in 2011 ury elapsed before hyperinflation appeared again. During the 20(11 century, hyperinflation occurred 2» times often associated with the monetary chaos

invohIng two world wars and the collapse of communism (Rcmholz 2003). Zimbabwe's hyperinflation of 2007-09 represents the world's 30th occurrence as w Working papers issued in 2011

ell as the continent's second bout (after a 1991 -94 episode in the ( ongo).-’Zimbabwe's HistoryZimbabwe is located in the southern region of

Globalization and Monetary Policy Institute2011 Annual Report, Federal Reserve Bank of DallasI Globalizationof Globalization: A JointEquilibrium Model

Globalization and Monetary Policy Institute2011 Annual Report, Federal Reserve Bank of DallasI Globalizationof Globalization: A JointEquilibrium Model

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