Macroeconomic structure and policy in Zimbabwe, analysis and empirical model: 1965-1988

Ibrahim A. Elbadawi and Klaus Schmidt-Hebbel

No 771, Policy Research Working Paper Series from The World Bank

Abstract: The authors develop and apply a macroeconomic general equilibrium model for Zimbabwe. The country faces the challenge of engaging in a program of fiscal stabilization and structural reform to address its current fiscal imbalance, high unemployment, and low growth prospects. The authors discuss macroeconomic changes over the last two decades, provide a model of the macroeconomic structure, and estimate aggregate equations for the main goods and asset markets. The macroeconomic framework they model integrates three features of the country's macroeconomy: (a) the noninflationary and almost exclusively domestic financing of the public sector deficit, which has been similar in gross terms to the private sector surplus; (b) sustained negative or low real interest rates, together with no apparent sign of excess demand in credit markets; and (c) the fact that sustained, high growth has never materialized after the dramatic economic declines of the late 1970s that resulted from economic sanctions and civil war.

Keywords: Economic Theory&Research; Environmental Economics&Policies; Economic Stabilization; Macroeconomic Management; Financial Intermediation (search for similar items in EconPapers)
Date: 1991-09-30
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Citations: View citations in EconPapers (1)

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