Measuring the Potential Output of South Africa

Author/Editor: Klein, Nir
Publication Date: August 25, 2011
Electronic Access: Free Full text (PDF file size is 2,373KB).
Use the free Adobe Acrobat Reader to view this PDF file

Summary: This paper provides an assessment of the South African potential output for the period 1985-2010 by applying both structural and nonstructural estimation techniques. The analysis suggests that, while potential output growth steadily accelerated in the post-apartheid era to about 3 1/2 percent (1994-2008), it has decelerated considerably following the outbreak of the financial crisis, as was observed in other advanced and emerging economies. While this indicates that, at around -1 1/ 2 percent, the estimated 2010 output gap was lower than previously thought, there is a fair amount of uncertainty regarding its "true" magnitude, reflecting in part the backward looking nature of the estimation methods. The paper concludes that the potential growth is likely to gradually revert to its precrisis pace and the output gap to have closed by early 2012.
Series: African Departmental Paper No. 11/02
Subject(s): Economic growth | Economic models | Exports | Production growth | Productivity | South Africa

Publication Date: August 25, 2011
ISBN/ISSN: 978-1-61635-213-4 Format: A web quality merged PDF
Stock No: MPOSET
Please address any questions about this title to