Macro Policy Seminar

aje on November 9, 2025

Lecture handout: Macro policy*

The key finding of monetary economics is that the root cause of inflation is excessive money creation. We looked at some specific examples of hyperinflation, and to learn more you can watch “Zimbabwe and Hyperinflation: Who Wants to Be a Trillionaire?” (Marginal Revolution University).

  • Steve Hanke runs the Troubled Currencies project which gathers black market data to construct up to date estimates of high inflation environments. You can see more here.

The concepts discussed in this section should help students to understand the rationale for Georgia’s “Law on Economic Freedom”, which limited the government to the following (see Lawson and Powell, 2019, p. 114):

  • Annual budget deficit of no more than 3% of GDP
  • National debt of no more than 60% of GDP
  • Annual government spending of no more than 60% of GDP
  • No new tax without voter approval

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