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Empirical Strategy

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Hyperinflation in Zimbabwe

Abstract

This chapter describes the empirical approach used to test two possible explanations for the emergence of hyperinflation in Zimbabwe. This involves constructing a price index, estimating a long-run money demand function, testing for the exogeneity of prices and calculating the seigniorage-maximising level of inflation for Zimbabwe.

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Notes

  1. 1.

    The null of no cointegration \( {\mathrm{H}}_0:{\delta}_2={\alpha}_2=0 \) is tested against the alternative of \( {\mathrm{H}}_1:{\delta}_2;\ne 0\kern0.5em {\alpha}_2;\ne 0 \) by means of an F-test using the Pesaran et al. (2001) bounds tables.

  2. 2.

    Monthly inflation did reach 33 million per cent in Zimbabwe in late 2008, beyond the estimation period of the article.

  3. 3.

    The hyperinflationary period sub-sample (2006M6–2008M1) does not contain enough data points over which an ARDL model could produce plausible converge parameters.

  4. 4.

    The Zimbabwe African National Union—Patriotic Front (ZANU—PF) is the party of Robert Mugabe, long-time president of Zimbabwe until 2017.

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Author information

Authors and Affiliations

  1. Central Bank of Ireland, Dublin, Ireland

    Tara McIndoe-Calder

  2. Economics Department, Trinity College Dublin, Dublin, Ireland

    Tara Bedi

  3. The South East Asian Central Banks Research and Training Centre, Kuala Lumpur, Malaysia

    Rogelio Mercado

Authors
  1. Tara McIndoe-Calder
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  2. Tara Bedi
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  3. Rogelio Mercado
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Corresponding author

Correspondence to Tara McIndoe-Calder .

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McIndoe-Calder, T., Bedi, T., Mercado, R. (2019). Empirical Strategy. In: Hyperinflation in Zimbabwe. Palgrave Pivot, Cham. https://doi.org/10.1007/978-3-030-31015-8_5

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  • DOI: https://doi.org/10.1007/978-3-030-31015-8_5

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  • Publisher Name: Palgrave Pivot, Cham

  • Print ISBN: 978-3-030-31014-1

  • Online ISBN: 978-3-030-31015-8

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

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