The Macroeconomics of Zimbabwe in the 1980s: A CGE Model Analysis

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Periodical article

Title:	The Macroeconomics of Zimbabwe in the 1980s: A CGE Model Analysis
Authors:	Davies, Rob Rattsø, Jørn Torvik, Ragnar
Year:	1994
Periodical:	Journal of African Economies
Volume:	3
Issue:	2
Period:	October
Pages:	153-198
Language:	English
Geographic term:	Zimbabwe
Subjects:	economic development Economics and Trade
External link:	https://jae.oxfordjournals.org/content/3/2/153.full.pdf
Abstract:	This article examines macroeconomic development in Zimbabwe in terms of sectoral balances and distributional shifts. The economic performance during the period 1981-1988 is evaluated with a five-sector CGE (Computable General Equilibrium) model assuming endogenous import rationing. A foreign exchange constraint links the exportables sector performance and the rationing of imported intermediates to the import-dependent construction and importables sectors. The model is used to identify driving forces in the growth pattern and for counterfactual investigations of the consequences of drought, exchange rate policy and a change in public expenditure patterns. Agricultural shocks and import compression policies are shown to be the major explanatory factors for the fluctuation and stagnation of economic growth. In the counterfactual experiments, expansionary devaluation and contractionary investment expansion are the result of the foreign exchange constraint. App., bibliogr., sum.