Potential Output and Total Factor Productivity Growth in Post-Apartheid South Africa, Issues 2003-2178
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.
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The Johansen Cointegrating Test for TFP OPEN and P1
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ă ă ă Actual GDP actual output alternative methodologies based on historical Blanchard and Quah Capacity Utilization capital and labor capital stock Cobb-Douglas cointegration contribute to TFP Contributions to Growth demand shocks DOPEN DTFP economy equipment and machinery estimates of potential estimating potential output F statistic F-test factor accumulation factors of production growth accounting growth in South HP filter increase in TFP inflationary pressures intensity of resource investment in machinery labor and capital lag length likelihood ratio test long-run impact macroeconomic policy Output Gap Measures paper provides percentage points period Phillips curve policy and institutional potential GDP potential growth rates potential output growth private sector participation production function approach real GDP growth resource utilization right scale Schwartz criterion Share of private short-run dynamics South Africa South African Reserve statistically significant step dummy structural break supply shocks SVAR Table TFP growth Total Factor Productivity trade openness trend output variables