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

21 Pages Posted: 3 Feb 2006

See all articles by Vivek B. Arora

Vivek B. Arora

International Monetary Fund (IMF) - African Department

Ashok Bhundia

International Monetary Fund (IMF)

Date Written: September 2003

Abstract

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.

Keywords: Potential output output gap total factor productivity South Africa

JEL Classification: O40 O47 O55

Suggested Citation

Arora, Vivek and Bhundia, Ashok, Potential Output and Total Factor Productivity Growth in Post-Apartheid South Africa (September 2003). IMF Working Paper No. 03/178, Available at SSRN: https://ssrn.com/abstract=880244

Vivek Arora (Contact Author)

International Monetary Fund (IMF) - African Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Ashok Bhundia

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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