Problem of Economic Development Solved

I came to Peru to study economic development in a developing country. The plan was to augment my resume, learn the issues, return to US, and continue studying for years until eventually I knew enough to start fixing third-world economies. That was the plan.

So, just imagine how I felt when I realized I had the solution for all of Peru's economic woes my first week in the capitol.

Here's Peru's fundamental problem (in a nut-shell): Yesterday, I was walking down the street and saw a churro stand.

Mmmm...I love churros, they remind me of elementary school lunches. Hmmm...Why is that the only food PSI could get right? Oooh, you know what would go really well with a churro? An Inca Kola, of course! (This bit here, of course is the profound inner-workings of mind)

So, I went up to the proprietor and offered him a s/.20 bill in exhange for a churro and Peru's gift to the world, Inca Kola. Then he gave me a look that with attitude said, "¿Esperes que te dé cambio por un veinte?" The look was definitely in Spanish. "You want me to give you change for a twenty?"

And gave him a look right back, "Would you rather not have my money?" That was it, he didn't have change and I didn't have a churro.

So now we get to my thesis. How can an economy function when people have too much money to spend? Every day, Peruvians with money to burn are burned by their country's flat-out refusal to mint more 50 centimo-coins. Okay, this is a bit of a conjecture, I don't know that the government won't mint more change. but how else do you explain why everyone wants change and no one has any?

This is a fundamental problem for a developing country, just think of the welfare loss. Think of all the good trades not made, it's an economist's nightmare.

So why has no one seen this before? I don't know, but I can't wait to tell my Development Theory Professor that he should start looking for a new job, because, problem solved: make more coins.