There's been quite a storm of discussion lately about inflation in Argentina. My understanding is that at the beginning of the year the government agency that was in charge of calculating inflation came out with some numbers that were relatively high. That upset the president (Nestor Kirchner) and apparently there was an argument which resulted, more or less, in the president insisting that future inflation reports should be more in line with his perceptions (i.e. lower and also completely invalid). I should note that Argentines tend to love conspiracies and are often quite critical of their government, so this version of the inflation story may not be completely accurate.

Argentine Inflation

The official numbers say that inflation is around 10% per year. If inflation were really at 10% per year then Menu Costs wouldn't be a big deal, but, as this sign outside of a butcher's shop shows, shop owners still place a high value on being able to change prices easily (with chalk):

Zimbabwe Inflation

On the other hand - in Zimbabwe they can no longer calculate inflation. (story from the bbc).

Many staple goods are often absent from shop shelves after the government ordered prices to be halved or frozen in a bid to stem galloping inflation.

As a shop owner, if the government told you that your price had to be $10 and the good costs you $20, are you going to stock the item - obviously not. That makes it much harder to calculate the inflation where the usual process is:

1. Identify a basket of "typical goods"
2. Keep historical data for those goods based on market prices
3. Compare the historical data

Without reliable data for step 2, it becomes a lot harder to do!