This study examined the causal relationships between inflation, Gross Domestic Product (GDP), domestic savings, and investment in Zimbabwe using Toda-Yamamoto causality tests and the Autoregressive Distributed Lag (ARDL) approach with secondary data spanning from 1990-2022. The Granger causality analysis revealed a bidirectional causal effect between inflation and GDP, indicating that inflation significantly impacts the country's economic growth. Additionally, the analysis showed a unidirectional causal relationship from inflation to domestic savings, suggesting that high and persistent inflation can erode the value of existing savings and discourage individuals from saving. Furthermore, the study found a distinct causal flow from savings to investment, without feedback in the opposite direction, highlighting the crucial role of a robust savings culture in providing the necessary foundation for sustained investment and economic growth. The ARDL approach provided further insights into the dynamic relationships between these variables. In the short run, lagged GDP and current and lagged savings positively influenced GDP, while the second lag of savings had a negative impact, supporting the Carroll-Weil hypothesis that savings typically follow, rather than precede, economic growth in the short run. The analysis also found a positive short-run and long-run relationship between investment and GDP, supporting the view that investment is an important factor of economic growth. The study recommends that the policy makers can leverage the synergies between savings, investment, and inflation management to foster sustained economic growth and development in line with the government development policies. Developing policies to attract savings and reduce the cost of savings, as well as promoting long-term savings over transactional savings, can increase the country's overall savings base.

This paper analyses the causal relationship between Foreign Portfolio Investment (FPI), Equities Market Volatility, Exchange Rate and Inflation in Zimbabwe using a monthly time series data between October 2018 and November 2021. The granger causality model was used to present the link between the variables, and EGARCH was used to account for volatility and asymmetric effects on the variables. To incorporate innovations and responses into the Granger model, impulse response functions were used. Links between exchange rate and foreign portfolio investments were found. This only suggests that exchange rate volatility will vary when overseas investors purchase and sell financial securities on the Zimbabwe Stock Exchange (ZSE). In contrast, foreign investors sell local financial securities when local stock market returns are negative, leading to a significant outflow of foreign portfolio investment thereby reducing demand for currency. A significant causal relationship was found between the volatility of the exchange rate and stock market returns. It is assumed that stock market returns, and foreign portfolio investments are caused by fluctuating currency rates. The relationship between exchange rate and ZSE returns, and inflation was found based on Granger causality. This implies that stocks are not suitable for long-term investments that compensate investors for their diminished purchasing power. Policy makers should advise the Zimbabwe Stock Exchange to recommend a reduction in capital gains tax and withholding tax and this encourages investors to hold local equities for a long time.