Dollarization: The Case of Zimbabwe

28 Pages Posted: 21 Apr 2013

Date Written: June 15, 2011

Abstract

This article investigates the recent monetary experience of Zimbabwe with dollarization. It shows how dollarization has allowed Zimbabwe to quash hyperinflation, restore stability, increase budgetary discipline, and reestablish monetary credibility. Zimbabwe’s hyperinflationary past and the stabilization measures taken by the government are outlined, and the consequences defined. Problems arising from a lack of financial integration, an error in the choice of currency to dollarize under, and the inability of the government to enter into a formal dollarization agreement are discussed.

Keywords: hyperinflation remedies, African economics, monetary systems, monetary policy, monetary crisis, central bank

JEL Classification: E40, E42, E52, E60, N17

Suggested Citation

Noko, Joseph, Dollarization: The Case of Zimbabwe (June 15, 2011). Cato Journal, Vol. 31, No. 2, 2011. Available at SSRN: https://ssrn.com/abstract=2253506

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