The Boomerang Effects: An Analysis of the Pre and Post Dollarisation Era in Zimbabwe
1
Department of Economic Sciences, North West University, Vanderbjilpark 1900, South Africa
2
Department of Management Sciences, Walter Sisulu University, Butterworth 4960, South Africa
*
Author to whom correspondence should be addressed.
Economies 2020, 8(2), 32; https://doi.org/10.3390/economies8020032
Received: 18 February 2020 / Revised: 3 April 2020 / Accepted: 8 April 2020 / Published: 17 April 2020
(This article belongs to the Special Issue Macroeconomics and Monetary Policy)
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.
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Keywords:
dollarisation; economic growth; economic integration; business cycles
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MDPI and ACS Style
Pasara, M.T.; Garidzirai, R. The Boomerang Effects: An Analysis of the Pre and Post Dollarisation Era in Zimbabwe. Economies 2020, 8, 32. https://doi.org/10.3390/economies8020032
AMA Style
Pasara MT, Garidzirai R. The Boomerang Effects: An Analysis of the Pre and Post Dollarisation Era in Zimbabwe. Economies. 2020; 8(2):32. https://doi.org/10.3390/economies8020032
Chicago/Turabian StylePasara, Michael T.; Garidzirai, Rufaro. 2020. "The Boomerang Effects: An Analysis of the Pre and Post Dollarisation Era in Zimbabwe" Economies 8, no. 2: 32. https://doi.org/10.3390/economies8020032
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