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Income distribution, persistent unemployment, and the classical growth cycle:evidence from South Africa

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  • Christopher Malikane

    (University of the Witwatersrand, South Africa)

Abstract

I formulate and calibrate a small 3D classical growth cycle model to explain the rise of income inequality, growth stagnation and the persistence of unemployment in South Africa between 1970-2005. This model exhibits interactions between economic growth, the employment rate, and the rate of profit. Simulation of the estimated model produces an underlying 59-year growth cycle for the South African economy, which is close to the one observed in the data. I find that the South African economy entered a phase of employment-enhancing growth in output around 2005, implying an estimated 37-year depression of the labour market.

Suggested Citation

  • Christopher Malikane, 2010. "Income distribution, persistent unemployment, and the classical growth cycle:evidence from South Africa," Journal of Developing Areas, Tennessee State University, College of Business, vol. 44(1), pages 187-200, September.
    • Handle: RePEc:jda:journl:vol.44:year:2011:issue1:pp:187-200
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    More about this item

    Keywords

    Rate of profit; long cycles; unemployment rate; capital accumulation; income distribution;
    All these keywords.

    JEL classification:

    • B14 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Socialist; Marxist
    • B24 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Socialist; Marxist; Scraffian
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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