TY  - RPRT
        AU  - Schwidrowski, Zuzana Brixiova
AU  - Ncube, Mthuli
        TI  - The Real Exchange Rate and Growth in Zimbabwe: Does the Currency Regime Matter?
        PY  - 2014/Aug/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 8398
        UR  - https://www.iza.org/index.php/publications/dp8398
        AB  - Zimbabwe faces growth and external competitiveness challenges, as indicated by its low trend growth and investment, declining share in the world exports, high current account deficits, and external debt. The stock-flow approach to the equilibrium exchange rate reveals that the real exchange rate experienced periods of sizeable overvaluation, both prior to the 2008 economic collapse and under the current multicurrency regime. While overvaluation hampers GDP growth, as well as growth and employment in export sectors, we have not found that undervaluation would raise it. Replacing the multicurrency regime anchored in the US$ by the South African rand as the sole transaction currency would help reduce overvaluation and stimulate exports and growth. Under any currency regime, Zimbabwe needs to adhere to sound macroeconomic policies, avoid overspending on public wages, and create environment conducive for investment.
        KW  - currency regime
KW  - Zimbabwe
KW  - growth
KW  - real exchange rate misalignment
KW  - employment
        ER  -