Makochekanwa, Albert (2008): Measuring the Welfare Cost of Inflation in Zimbabwe.
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The study estimates the long-run equilibrium relationship between money balance as a ratio of income and treasury bill rate for the Zimbabwean economy. These estimates are done for two periods, the entire period (using quarterly data) of 1980:01 to 2005:04 and the hyperinflationary period (using monthly data) of 1999:01 to 2005:12. These estimates are in turn used to obtain estimates for the welfare cost of inflation. Using the Johansen technique, the research estimates a log-log specification and a semi-log model of the above relationship for the two periods. Estimates suggest that the welfare cost of inflation for Zimbabwe ranges between 0.9% and 23.4% of GDP for a band of 10 to 300% of inflation in the case of estimations done for the entire period. Welfare cost estimates for the hyperinflationary period are 0.4% and 27.6% of GDP, respectively.
|Item Type:||MPRA Paper|
|Original Title:||Measuring the Welfare Cost of Inflation in Zimbabwe|
|English Title:||Measuring the Welfare Cost of Inflation in Zimbabwe|
|Keywords:||Cointegration; Interest elasticity; Money Demand; Welfare Cost of Inflation|
|Subjects:||E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation
E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E52 - Monetary Policy
|Depositing User:||Albert Makochekanwa|
|Date Deposited:||30. Apr 2010 02:14|
|Last Modified:||02. Jan 2016 15:37|
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