Evolution of Zimbabwe’s economic tragedy: a chronological review of macroeconomic policies and transition to the economic crisis
AbstractThis paper chronicles Zimbabwe’s macroeconomic policies and economic development trends from the post independence period up to end of 2006. By focussing on monetary and exchange rate policies and their influence on economic developments before and after the reform programme in 1991, the paper attempts to reveal the critical macroeconomic policy underpinnings of Zimbabwe’s post-2000 economic tragedy. A key insight from the review is that despite what seemed to be concerted economic management efforts, the authorities actually never succeeded in attaining sustainable economic stabilization goals from the very start of the post-independence era. The constraints imposed by the inward looking policies of the 1980s and the eventual failure of ‘free market’ exchange rate policies of the early 1990s resulted in chronic real exchange rate overvaluation and depletion of foreign exchange reserves. This eventually culminated in the so-called “Black Friday” currency crash, and a severe foreign exchange crisis that has since been viewed as one of the most important factors that led to the economic tragedy. Hence in retrospect, the review concludes that the post-independence government in Zimbabwe never succeeded in bringing the economy into long term structural equilibrium and, thus failed to create an enabling environment for medium to long term macroeconomic policy sustainability.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 32703.
Date of creation: 08 Aug 2011
Date of revision:
Zimbabwe; exchange rate misalignment; macroeconomic policy; economic crisis;
Find related papers by JEL classification:
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-08-15 (All new papers)
- NEP-HIS-2011-08-15 (Business, Economic & Financial History)
- NEP-MAC-2011-08-15 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Huizinga, H.P., 1997.
"Real exchange rate misalignment and redistribution,"
Open Access publications from Tilburg University
urn:nbn:nl:ui:12-73813, Tilburg University.
- Huizinga, Harry, 1997. "Real exchange rate misalignment and redistribution," European Economic Review, Elsevier, Elsevier, vol. 41(2), pages 259-277, February.
- Huizinga, H., 1994. "Real Exchange Rate Misalignment and Redistribution," Papers, Tilburg - Center for Economic Research 9490, Tilburg - Center for Economic Research.
- Huizinga, H.P., 1994. "Real exchange rate misalignment and redistribution," Discussion Paper, Tilburg University, Center for Economic Research 1994-90, Tilburg University, Center for Economic Research.
- Steven Radelet & Jeffrey D. Sachs, 1998. "The East Asian Financial Crisis: Diagnosis, Remedies, Prospects," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 1-90.
- Backus, David & Driffill, John, 1985. "Rational Expectations and Policy Credibility Following a Change in Regime," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 52(2), pages 211-21, April.
- Edwards, Sebastian, 1989.
"Exchange Controls, Devaluations, and Real Exchange Rates: The Latin American Experience,"
Economic Development and Cultural Change,
University of Chicago Press, vol. 37(3), pages 457-94, April.
- Sebastian Edwards, 1987. "Exchange Controls, Devaluations and Real Exchange Rates: The Latin American Experience," UCLA Economics Working Papers, UCLA Department of Economics 450, UCLA Department of Economics.
- Sebastian Edwards, 1987. "Exchange Controls, Devaluations and Real Exchange Rates: The Latin American Experience," NBER Working Papers 2348, National Bureau of Economic Research, Inc.
- Jason Furman & Joseph E. Stiglitz, 1998. "Economic Crises: Evidence and Insights from East Asia," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 1-136.
- Sebastian Edwards, 1989. "Real Exchange Rates in the Developing Countries: Concepts and Measure- ment," NBER Working Papers 2950, National Bureau of Economic Research, Inc.
- Agenor, P.R., 1992. "Parallel Currency Markets in Developing Countries : Theory, Evidence, and Policy Implications," Princeton Studies in International Economics, International Economics Section, Departement of Economics Princeton University, 188, International Economics Section, Departement of Economics Princeton University,.
- Goderis, Benedikt & Ioannidou, Vasso P., 2008.
"Do high interest rates defend currencies during speculative attacks New evidence,"
Journal of International Economics, Elsevier,
Elsevier, vol. 74(1), pages 158-169, January.
- Benedikt Goderis & Vasso P. Ioannidou, 2006. "Do High Interest Rates Defend Currencies During Speculative Attacks? New Evidence," Economics Series Working Papers WPS/2006-11, University of Oxford, Department of Economics.
- Benedikt Goderis & Vasso P. Ioannidou, 2006. "Do High Interest Rates Defend Currencies During Speculative Attacks? New evidence," CSAE Working Paper Series 2006-11, Centre for the Study of African Economies, University of Oxford.
- Ndlela, Daniel & Robinson, Peter, 2007. "Distortions to Agricultural Incentives in Zimbabwe," Agricultural Distortions Working Paper, World Bank 48515, World Bank.
- Sebastian Edwards, 1989. "Tariffs, Capital Controls, and Equilibrium Real Exchange Rates," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 22(1), pages 79-92, February.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.