The Boomerang Effects: An Analysis of the Pre and Post Dollarisation Era in Zimbabwe

Michael Takudzwa Pasara and Rufaro Garidzirai
Additional contact information
Michael Takudzwa Pasara: Department of Economic Sciences, North West University, Vanderbjilpark 1900, South Africa
Rufaro Garidzirai: Department of Management Sciences, Walter Sisulu University, Butterworth 4960, South Africa

Economies, 2020, vol. 8, issue 2, 1-20

Abstract: Does dollarisation influence economic activity in Zimbabwe? The question has incited a lot of debates among researchers and analysts. In an attempt to answer this question, the study used an Auto Regressive Distributive Lag (ARDL) procedure, to investigate the effects of dollarisation on economic growth in Zimbabwe. The study employed quarterly data over a 14-year period between 2000 and 2014. The results of the study indicate that dollarisation, gross domestic investment and trade openness are positively related to economic growth. Based on the findings of the study, the paper recommends that Zimbabwean policy makers should establish additional complementary policies which foster economic integration with anchor countries to reduce credit risk. On the other hand, dollarisation should be maintained since it resulted in economic stability and improved financial sector credibility. It is therefore still premature to de-dollarise the economy until a sufficient level of credibility is gained by the central bank.

Keywords: dollarisation; economic growth; economic integration; business cycles (search for similar items in EconPapers)
JEL-codes: E F I J O Q (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.mdpi.com/2227-7099/8/2/32/pdf (application/pdf)
https://www.mdpi.com/2227-7099/8/2/32/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jecomi:v:8:y:2020:i:2:p:32-:d:346806

Access Statistics for this article

Economies is currently edited by Ms. Hongyan Zhang

More articles in Economies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().