Meditations and Learnings

Meditations and Learnings

Why Solving Hyperinflation is Like Dieting

Some economic problems are genuinely complex, with the best estimate for what might work being the most attractive option. However, others are easy in theory but a political pain in the arse. It’s analogous to medical interventions: Obese? Create a caloric deficit and watch the weight fall away.

There is broad economic consensus on tackling hyperinflation - the will to take the necessary action is where things fall apart. Like losing 100lbs, reducing inflation requires constraint and the fortitude to withstand pain. Printing less money and avoiding subsidies or handouts to help people through the hard times is unpopular amongst the population precisely because it feels so distressing. Ignoring cries to help short-term, and doom the country long-term, is a challenge many governments fail to overcome.