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Zimbabwe’s Hyperinflation Money Demand Model

Albert Makochekanwa

No 200712, Working Papers from University of Pretoria, Department of Economics

Abstract: The research attempts to empirically study the demand for money, especially the magnitudes of the price expectation and real cash balance adjustment for Zimbabwe. Price expectation and real cash balance adjustment models are estimated. The results show that both the interest rate and the rate of change in prices are relevant variables for explaining the variations in the demand for real cash balances in Zimbabwe. Overall, the findings suggest that the Zimbabwean hyperinflation does not appear to have been a self- generating process independent of money supply.

Keywords: Hyperinflation; Real Cash Balances; Price Expectation; Equilibrium; Error Correction Model (search for similar items in EconPapers)
JEL-codes: E41 P24 E51 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2007-07
New Economics Papers: this item is included in nep-afr, nep-cba, nep-mac and nep-mon
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