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Zimbabwe: A Quest for a Nominal Anchor

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  • Mr. Arto Kovanen

Abstract

This study examines the appropriateness of alternative intermediate monetary policy targets for Zimbabwe in light of the stability of the demand for money and the information content of financial variables for predicting price level movements. Results of the study indicate that a well-defined long-run demand relation exists for currency in circulation, but not for other monetary aggregates. Currency in circulation has strong information content for predicting future price level movements. The information content of other financial variables, such as the exchange rate and interest rates, is weaker. Statistical relationships break down of the outset of high inflation.

Suggested Citation

  • Mr. Arto Kovanen, 2004. "Zimbabwe: A Quest for a Nominal Anchor," IMF Working Papers 2004/130, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2004/130
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    Cited by:

    1. Kuikeu, Oscar, 2011. "Comment la dernière crise financière a relancé le débat relatif à l'arrimage du fcfa à l'euro [How the recent financial crisis have revived the debate on the parity between fcfa and euro]," MPRA Paper 32077, University Library of Munich, Germany.
    2. Tara McIndoe-Calder, 2018. "Hyperinflation in Zimbabwe: money demand, seigniorage and aid shocks," Applied Economics, Taylor & Francis Journals, vol. 50(15), pages 1659-1675, March.
    3. International Monetary Fund, 2009. "Uganda and Rwanda: Selected Issues," IMF Staff Country Reports 2009/036, International Monetary Fund.
    4. Lydia Ndirangu & Esman Morekwa Nyamongo, 2015. "Financial Innovations and Their Implications for Monetary Policy in Kenya," Journal of African Economies, Centre for the Study of African Economies, vol. 24(suppl_1), pages 46-71.
    5. Daniel Makina, 2010. "Historical Perspective on Zimbabwe’s Economic Performance," Journal of Developing Societies, , vol. 26(1), pages 99-123, March.
    6. Ms. Sònia Muñoz, 2006. "Suppressed Inflation and Money Demand in Zimbabwe," IMF Working Papers 2006/015, International Monetary Fund.

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