Output, Employment and Financial Sanctions in South Africa

28 Pages Posted: 15 Feb 2006

See all articles by Tamim Bayoumi

Tamim Bayoumi

International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Date Written: December 1990


The effects of the marked slowdown in the growth of the capital stock in South Africa since 1985, associated with political uncertainty and financial sanctions, and future growth prospects are quantified using a modified version of the Lewis development model. This is done by estimating production functions for the nonprimary and mining sectors of the South African economy involving skilled (white) labor, unskilled (nonwhite) labor and capital. It is concluded that each 1 percent change in the growth rate of the capital stock leads to at 0.8 percent change in output growth, and hence the fall in investment since 1985 has lead to significant falls in growth, employment and real wages.

JEL Classification: 121, 226, 441

Suggested Citation

Bayoumi, Tamim, Output, Employment and Financial Sanctions in South Africa (December 1990). IMF Working Paper, Vol. , pp. 1-28, 1990. Available at SSRN: https://ssrn.com/abstract=885139

Tamim Bayoumi (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6333 (Phone)
202-623-4795 (Fax)

Centre for Economic Policy Research (CEPR)

United Kingdom

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