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On the Real Exchange Rate Effects of Higher Electricity Prices in South Africa


  • Jan van Heerden

    () (Department of Economics, University of Pretoria)

  • James Blignaut

    () (Department of Economics, University of Pretoria)

  • Andre Jordaan

    () (Department of Economics, University of Pretoria)


The paper uses a static Computable General Equilibrium (CGE) model of South Africa and simulates various shocks to the price of electricity. We attempt di¤erent closures to the model and compare their respective e¤ects on the Consumer Price Index. In a CGE model, this is measuring the real appreciation of the exchange rate, or international trade competitiveness. In general, we conclude that electricity prices per se does not signi?cantly in?uence the real exchange rate, regardless of which closure is used.

Suggested Citation

  • Jan van Heerden & James Blignaut & Andre Jordaan, 2008. "On the Real Exchange Rate Effects of Higher Electricity Prices in South Africa," Working Papers 200836, University of Pretoria, Department of Economics.
  • Handle: RePEc:pre:wpaper:200836

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    References listed on IDEAS

    1. Murray Leibbrandt & James Levinsohn & Justin McCrary, 2005. "Incomes in South Africa Since the Fall of Apartheid," NBER Working Papers 11384, National Bureau of Economic Research, Inc.
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    JEL classification:

    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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