A framework for macroeconomic consistency for Zimbabwe

The objective of this paper is to apply a framework for macroeconomic consistency to Zimbabwe. Using annual data for 1981and 1987, the paper illustrates the usefulness of imposing consistency on the flow budget accounts (in both current and constant prices) of a developing economy. It presents the following comprehensive six-sector application: the central government, public enterprises plus local government, the central bank, the deposit banking system, the nonfinancial private sector, and the external sector. This framework provides: (a) an organizing device with which to check the internal consistency of data; (b) a snapshot of the principal resource transfers in the economy, which can be helpful in diagnosing and analyzing macroeconomic imbalances and unsustainable resources flows; and (c) a tool for financial programming or a first step in a model-building effort that entails specifying behavioral relationships.