Real exchange rate misalignment and sectorial output in Zimbabwe

Abstract

Using the feasible generalised least squares panel data techniques and data for the period 1980 – 2003 from a representative sample of Zimbabwean sectors that include agriculture, manufacturing and mining sectors, the study indicated that real exchange rate misalignment is harmful to sectoral output.. The study indicated instead of undervaluation necessitating sectoral performance it however negatively affects sectoral output while real exchange rate overvaluation as expected, negatively and significantly affects sectoral output.