Research Project Proposal

TOPIC: THE EFFECTS OF HYPERINFLATION ON COMMERCIAL BANKS

TABLE OF CONTENTS

Executive Summary………………………………………………………………………..
Introduction and Background …………………………………………………………….
Purpose and Objectives of Research ……………………………………………………...
Scope and Limitations of Study …………………………………………………………..
Terminologies Used ………………………………………………………………………
Literature Review ………………………………………………………………………...
Methodologies To Be Used ………………………………………………………….......
References ………………………………………………………………………………..

EXECUTIVE SUMMARY
This study is meant to analyze the effects of hyperinflation within an economy on commercial banks, with the aim of reducing the negative effects of this economic situation, while capitalizing on any positive effects that may arise. This would enable the top management of commercial banks to continue operating profitably in a mostly adverse economy. The main methodologies of collecting data would be interviews with bank managers as well as secondary data on how commercial banks in countries that recently experienced hyperinflation managed their operations.

INTRODUCTION AND BACKGROUND
Hyperinflation can be defined as “extremely rapid or out of control inflation.” It is a situation where the price increases are so out of control, that the concept of inflation is useless (Investopedia, 2011). The most common cause of hyperinflation is a rapid rate of increase of money supply within an economy, without a corresponding increase in Gross Domestic Product or real output. This is very common in the modern economies that are based on paper currencies, which can be easily increased without having to increase real output. A common occurrence in countries experiencing hyperinflation is that the central bank has to print notes of larger denominations, as those with smaller denominations lose their intrinsic value. Hyperinflation can be viewed as a 20th and 21st century phenomenon. The most famous examples of hyperinflation are Germany in the 1920s, and more... [continues]

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