Saturday, July 05, 2008

Don't tell Cabraal

Apparently the German government is doing Zimbabweans a favor by stopping the Munich-based company which provides the 'high quality' paper for the Zimbabwean central bank to print it's bank notes which helps create the countries' million percent inflation. The WSJ has more.

Incidentally, it's the same company behind the Germany's own hyperinflation in the 1920s. With such an impressive record and with Sri Lankan inflation hovering at around 30% (modified index rate), no doubt the company is looking at Sri Lanka as it's next big client.

Much more at Marginal Revolution including a pointer to a very relevant paper by Greg Mankiw for the Sri Lankan context.

p.s. -- for the unintiated, Cabraal is Sri Lanka's governer for the central bank. More on inflation at Deaned.

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