## IMF Staff Papers, Volume 48, No. 2

_IMF Staff Papers, December 12, 2001_

## Source details

**Canonical URL:** [IMF Staff Papers, Volume 48, No. 2](https://www.imf.org/en/publications/imf-staff-papers/issues/2016/12/30/imf-staff-papers-volume-48-no-15455)

## Other formats

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## Bibliographic details
- Published: December 12, 2001
- Series: IMF Staff Papers
- Volume: 48
- DOI: https://doi.org/10.5089/9781451974256.024

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### Summary
- This paper analyzes the link between product variety and economic growth.
- It finds support for the hypothesis that a greater degree of product variety relative to the United States helps to explain relative per capita GDP levels.
- The paper presents an empirical study for South Africa, which indicates:
  - there exists a stable money demand type of relationship among domestic prices, broad money, real income, and interest rates, and
  - a long-term relationship among domestic prices, foreign prices, and the nominal exchange rate.

### Empirical findings and implications
- Product variety and income:
  - Greater product variety relative to the United States is associated with higher relative per capita GDP levels.
- South Africa case study:
  - Stable money demand relationship among domestic prices, broad money, real income, and interest rates.
  - Long-term relationship among domestic prices, foreign prices, and the nominal exchange rate.
- These findings connect microeconomic product variety concepts with macroeconomic price, money, and exchange rate dynamics.

### Subjects and keywords
- Subjects: Agroindustries, Defense spending, Economic sectors, Expenditure, Inflation, Inflation targeting, Monetary policy, Prices
- Keywords: Africa, Agroindustries, currency demand, Defense spending, East Asia, Eastern Europe, Europe, Global, Inflation, Inflation targeting, military spending, pass-through behavior, pass-through coefficient, price, product variety, SP

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_Source: https://www.imf.org/en/publications/imf-staff-papers/issues/2016/12/30/imf-staff-papers-volume-48-no-15455_