Potential Output and total Factor Productivity Growth in Post-Apartheid South Africa

Author/Editor:

Vivek B. Arora ; Ashok Bhundia

Publication Date:

September 1, 2003

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper provides estimates of potential output growth in post-apartheid South Africa using both time trend techniques and a production function approach which indicates a potential growth rate of around 3 percent. The implied output gap provides statistically significant information for predicting inflation and could thus provide valuable input for formulating macroeconomic policy. Growth accounting and regression analysis suggest that an increase in trend GDP growth after the end of apartheid in 1994 is attributable to higher TFP growth driven by trade liberalization and greater private sector participation.

Series:

Working Paper No. 2003/178

Subject:

Capacity utilization Output gap Potential output Production Production growth Total factor productivity

English

Publication Date:

September 1, 2003

ISBN/ISSN:

9781451858976/1018-5941

Stock No:

WPIEA1782003

Pages:

21

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