An Analysis of the Effects of Hyperinflation on Manufacturing Sector Output. A Case of Zimbabwe’s Manufacturing Firms 2000 – 2013

This paper seeks to analyse the effects of hyperinflation in Zimbabwe on man-ufacturing sector output over the period 2000 - 2009. Interviews were carried out to find the challenges that hyperinflation pose on the sector. Regression approach through application of co-integration was also performed to find the relationship between hyperinflation and volume of manufacturing sector out-put. The study revealed that firms in the sector engaged various techniques to crossover the hyperinflationary turmoil. The Granger causality test is conduct-ed in the unrestricted vector autoregressive model and it shows that in the short run hyperinflation reduces manufacturing sector output since the sector is highly monetized and has depreciating assets.