Zimbabwe’s Hyperinflation Money Demand Model
AbstractThe research attempts to empirically study the demand for money, especially the magnitudes of the price expectation and real cash balance adjustment for Zimbabwe. Price expectation and real cash balance adjustment models are estimated. The results show that both the interest rate and the rate of change in prices are relevant variables for explaining the variations in the demand for real cash balances in Zimbabwe. Overall, the findings suggest that the Zimbabwean hyperinflation does not appear to have been a self- generating process independent of money supply.
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Bibliographic InfoPaper provided by University of Pretoria, Department of Economics in its series Working Papers with number 200712.
Length: 24 pages
Date of creation: Jul 2007
Date of revision:
Hyperinflation; Real Cash Balances; Price Expectation; Equilibrium; Error Correction Model;
Find related papers by JEL classification:
- E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
- P24 - Economic Systems - - Socialist Systems and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation
- E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
This paper has been announced in the following NEP Reports:
- NEP-AFR-2007-11-17 (Africa)
- NEP-ALL-2007-11-17 (All new papers)
- NEP-CBA-2007-11-17 (Central Banking)
- NEP-MAC-2007-11-17 (Macroeconomics)
- NEP-MON-2007-11-17 (Monetary Economics)
You can help add them by filling out this form.
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- Terrence Kairiza, 2009. "Unbundling Zimbabwe’s journey to hyperinflation and official dollarization," GRIPS Discussion Papers 09-12, National Graduate Institute for Policy Studies.
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