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A Growth Model For South Africa

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  • Jørn Rattsø
  • Hildegunn e. Stokke

Abstract

We examine the South African growth experience during 1960-2005 using an intertemporal growth model. The model combines old growth theory investment dynamics and new growth theory endogenous productivity growth. The consumption and investment decisions are intertemporal and assume open capital markets. Structural change is captured by separating the traded and nontraded sectors, and sectoral productivity growth is determined in a barriers-to-growth framework. Calibration of the model shows how the growth experience combines neoclassical convergence, technology spillovers with barriers and productivity-investment interaction. Counterfactual analysis shows the growth costs of sanctions and protectionism. The suggested model is an alternative to existing growth modelling in South Africa, in which investments are short-sighted and productivity growth is imposed exogenously. Copyright (c) 2007 The Authors. Journal compilation (c) 2007 Economic Society of South Africa.

Suggested Citation

  • Jørn Rattsø & Hildegunn e. Stokke, 2007. "A Growth Model For South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 75(4), pages 616-630, December.
  • Handle: RePEc:bla:sajeco:v:75:y:2007:i:4:p:616-630
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    References listed on IDEAS

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    1. Dani Rodrik, 2008. "Understanding South Africa's economic puzzles ," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 769-797, October.
    2. Roberto Alvarez & Ricardo A. López, 2008. "Is Exporting a Source of Productivity Spillovers?," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(4), pages 723-749, December.
    3. Ricardo Hausmann & Bailey Klinger, 2008. "South Africa's export predicament ," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 609-637, October.
    4. Lawrence Edwards & Robert Lawrence, 2006. "South African Trade Policy Matters: Trade Performance & Trade Policy," CID Working Papers 135, Center for International Development at Harvard University.
    5. Jeffrey D. Sachs & Andrew M. Warner, 1995. "Economic Convergence and Economic Policies," NBER Working Papers 5039, National Bureau of Economic Research, Inc.
    6. Philippe Aghion & Matias Braun & Johannes Fedderke, 2008. "Competition and productivity growth in South Africa," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 741-768, October.
    7. Stan Du Plessis & Ben Smit, 2007. "South Africa's Growth Revival After 1994," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 16(5), pages 668-704, November.
    8. Lawrence Edwards & Robert Z. Lawrence, 2006. "South African Trade Policy Matters: Trade Performance and Trade Policy," NBER Working Papers 12760, National Bureau of Economic Research, Inc.
    9. Philippe Aghion & Steven Durlauf (ed.), 2005. "Handbook of Economic Growth," Handbook of Economic Growth, Elsevier, edition 1, volume 1, number 1, August.
    10. Aron, Janine & Muellbauer, John, 2007. "Inflation Dynamics and Trade Openness," CEPR Discussion Papers 6346, C.E.P.R. Discussion Papers.
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    Citations

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    Cited by:

    1. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2012. "North–South technology transfer in unionised multinationals," Journal of Development Economics, Elsevier, vol. 99(2), pages 385-395.
    2. Rattsø, Jørn & Stokke, Hildegunn, 2009. "Wage inequality, comparative advantage and skill biased technical change in South Africa," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 34, Verein für Socialpolitik, Research Committee Development Economics.
    3. Rattsø, Jørn & Stokke, Hildegunn E., 2012. "Trade policy in a growth model with technology gap dynamics and simulations for South Africa," Journal of Economic Dynamics and Control, Elsevier, vol. 36(7), pages 1042-1056.
    4. Wim Naudé, 2011. "Economic Development in Sub-Saharan Africa: The Case of the Big Four," Working Papers 2011/34, Maastricht School of Management.
    5. Jørn Rattsø & Hildegunn E. Stokke, 2009. "Trade barriers to growth in South Africa: Endogenous investment-productivity-trade interaction," DEGIT Conference Papers c014_010, DEGIT, Dynamics, Economic Growth, and International Trade.

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