Think About It Before Making Demands: Zimbabwe

Think About It Before Making Demands: Zimbabwe

Prices of commodities have been going up. Meanwhile, most workers have not received salary increments to compliment their purchasing power. Normally in such circumstances, a salary increment would be a good go-to idea. In a way to help workers curb the gap created by inflation.

As a nation, we are between a rock and a hard place. We have a serious economic crisis that requires serious solutions. In my opinion, the government and the policymakers of Zimbabwe are in a difficult position. We may not have inflation targeting as one of our instruments to maintain economic stability. However, it is still a relevant economic macroeconomic variable that needs to be stabilized.

What comes first between curbing inflation and improving standards of living? Just don’t do anything to hurt the economy! Currently, the new money on the market is more of coins and less of notes. It reduces the rate at which cash money demand as people prefers notes to coins. Furthermore, inflation is good for the economy and better than deflation if it is normal. A continuous increase in prices is what we call inflation.

On the bleak side, if salaries increase every commodity price increase. That is the law of too much money chasing too few goods. Therefore, by not increasing salaries, the vicious circle of inflation is curbed. If not the cycle goes on and on until it is hyperinflation due to monetization. One can either demand salary increments at the expense of inflation or understanding the sufferings for long-run results. Food for thought…

After said and done, it is essential for us to understand the economic issues before making demands. We may either suffer now and enjoy later. Or enjoy now whilst paving a way to another hyperinflation like the 2007 and 2008 period.

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