The research attempts to empirically study the demand for money, especially the
magnitudes of the price expectation and real cash balance adjustment for Zimbabwe.
Price expectation and real cash balance adjustment models are estimated. The results
show that both the interest rate and the rate of change in prices are relevant variables for
explaining the variations in the demand for real cash balances in Zimbabwe. Overall, the
findings suggest that the Zimbabwean hyperinflation does not appear to have been a selfgenerating
process independent of money supply.