The New Monetary Economics, Zimbabwe style

Debit card machines are proliferating in Zimbabwe’s cities — not only in churches but also in supermarkets, betting parlors, nightclubs, parking areas and every other business happy to accept paper cash but unable to dispense it. If there are no card-reading machines around, many shoppers now text payments on their cellphones.

A kind of Gresham’s Law is operating:

But Zimbabwe is hurtling toward a plastic future for a simple reason: It is running out of cash, specifically the American dollars it adopted in 2009 before abandoning its own troubled currency. Anxious about their nation’s political and economic troubles, many Zimbabweans have been hoarding dollars or taking them out of the country. Banks have slashed daily withdrawal limits. A.T.M.s now sit empty.

Here is more from Jeffrey Moyo and Norimitsu Onishi at the NYT.  In the countryside, barter is returning and the article is interesting throughout.