The Impact of Global Commodity Price Shocks on Liquidity in Zimbabwe
Date
2021-04-22
Authors
Mabuka, Stanley
Journal Title
Journal ISSN
Volume Title
Publisher
University of Zimbabwe
Abstract
The study investigated the impact of global commodity price shocks on liquidity in
Zimbabwe using monthly time series data spanning from 2009M01 to 2017M12. The study
employed the first order VAR model based on impulse response functions and forecast
error variance decomposition. Further, a two-step regression procedure was employed to
determine the shock propagation mechanism. The results obtained confirmed that global
commodity price shocks impact on liquidity in Zimbabwe. Within the period under review,
commodity price shocks were found to be propagated into the economy through the fiscal
performance transmission mechanism.