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

September 1, 2003

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Format: Chicago

Vivek B. Arora, and Ashok Bhundia. Potential Output and total Factor Productivity Growth in Post-Apartheid South Africa, (USA: International Monetary Fund, 2003) accessed December 22, 2024

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.

Subject: Capacity utilization, Output gap, Potential output, Production, Production growth, Total factor productivity

Keywords: Africa, Capacity utilization, Estimate, Estimates of the output gap, Inflation, Output gap, Output gap measure, Output gap methodology, Potential GDP, Potential output, Production function approach, Production growth, South Africa, Total factor productivity, WP

Publication Details

Pages:

21
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2003/178
Stock No:

WPIEA1782003
ISBN:

9781451858976
ISSN:

1018-5941

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