Persistence of Inefficient and Unfair Economic Outcomes

Global Inflation Rates by Country in 2022 (Figure 7.2)

Evidence of High Inflation Correlating with National Crises (2022)

Challenges and Approaches to Measuring Governance Quality

Analyzing the Root Cause of an Economic Crisis

A country is experiencing hyperinflation, with prices doubling monthly. The government, deeply in debt from funding a prolonged military conflict, is printing vast sums of money to cover its expenses. This has led to a breakdown in public services and widespread social unrest. Based on the hypothesis that links governance quality to economic outcomes, what is the most fundamental cause of this hyperinflation?

Differentiating Sources of Inflationary Crises

A specific economic hypothesis proposes a causal chain linking the quality of a country's governance to its inflation outcomes. Arrange the following phenomena into the correct sequence as described by this hypothesis, from the initial cause to the final effect.