IMF Working Papers

Zimbabwe: A Quest for a Nominal Anchor

By Arto Kovanen

July 1, 2004

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Arto Kovanen. Zimbabwe: A Quest for a Nominal Anchor, (USA: International Monetary Fund, 2004) accessed October 12, 2024
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.

Subject: Currencies, Demand for money, Depreciation, Exchange rates, Foreign exchange, Inflation, Monetary base, Money, National accounts, Prices

Keywords: And inflation, Consumer price inflation, Crawling-peg exchange rate regime, Currencies, Currency demand, Currency depreciation, Demand for money, Depreciation, Exchange rate, Exchange rates, Inflation, Innovation affect inflation, Monetary policy, Money demand relation, Narrow money, Nominal anchors, Price level, Price level variance, Reserve money granger, Sub-Saharan Africa, WP, Year-on-year inflation

Publication Details

  • Pages:

    41

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2004/130

  • Stock No:

    WPIEA1302004

  • ISBN:

    9781451855227

  • ISSN:

    1018-5941

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