Zimbabwe: A Quest for a Nominal Anchor

 
Author/Editor: Kovanen, Arto
 
Publication Date: July 01, 2004
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: 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.
 
Series: Working Paper No. 04/130
Subject(s): Monetary policy | Zimbabwe | Demand for money | Inflation

Author's Keyword(s): Monetary policy | demand for money | nominal anchors | and inflation
 
English
Publication Date: July 01, 2004
ISBN/ISSN: 1934-7073 Format: Paper
Stock No: WPIEA1302004 Pages: 40
Price:
US$15.00 (Academic Rate:
US$15.00 )
 
 
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