HomeLettersInflation-adjusted accounts are necessary

Inflation-adjusted accounts are necessary

I MAKE reference to an article which appeared in the Zimbabwe Independent (November 16) by one Admire Mavolwane tiltled “Inflation-adjusted accounts: for what?” I am really disappointed that your paper really published such a story/comment. It’s s

hocking at least from my perspective that people don’t see the need to publish inflation-adjusted accounts in a hyper-inflationary environment.


Your columnist got it all wrong that it’s all about a trend, fashion as he/she calls it. Investors seek real returns and these are after inflation adjustment. What does it help an investor to pour money on a 1 000% return investment when inflation is over 7 000% because that represents negative returns?


I think Mavolwane should read more on the Fisher hypothesis and on real investment.



 


Bekithemba Mpofu,


bm256@st-andrews.ac.uk

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