Economics Coursework - Macroeconomics, Unemployment and Inflation Essay - 1

Economics Coursework - Macroeconomics, Unemployment and Inflation - Essay Example Thousands of desperate persons from Zimbabwe are migrating to South Africa on a weekly basis. South African cannot support the load of many more people since their economy is not doing that well itself. The immigration authorities are deporting 3900 Zimbabwean every week (Wines, 2007). To put in perspective the effect the incredible inflation has on time value of money of the Zimbabwe currency a person that used to make $9 month in salary is now making $2 (Wines, 2007). A hyperinflation event causes great human suffering since people become desperate and frighten that from one day to another there money is losing 12% of value on a daily basis meaning that the next they might not be able to buy the primary necessity goods such as food and medicine. Hyperinflation is one of worst economic systems any economic system could face. In the 1980’s the Latin American country of Argentina in the 1980’suffered through a prolonged hyperinflation era which destroyed the economic system of this nation. The Zimbabwe crisis is even worst that what in Argentina since that nation was not living a sub-human levels of poverty such as the people of Zimbabwe were experiencing even prior that the economic chaos there are currently encountering. The current hyperinflation state of Zimbawe compares with some of the world cases of hyperinflation in the world history. Some of the most famous hyperinflation cases are illustrated in the table below: The graph below shows a comparative analysis of country with normal inflation, high inflation under normal parameters and hyperinflation. The average inflation in the European Union in 2006 was 3.1% and in Puerto Rico in 2007 was 11.6% (Completelandlord, 2007). The Zimbawe economic state is causing panic and as of right now has no immdiate solution. The root of the problem which is causing the chaotic state in terms of economic status and sociahumanistic effects in Zimbabwe include factors