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The pace of potential output growth in the South African economy

Author

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  • N Ehlers
  • L Mboji
  • M M Smal

Abstract

In a flexible inflation-targeting framework the output and inflation gaps are key measures of inflationary pressures and play an important role in determining the optimal policy interest rate. The estimation of potential output is, however, a challenge since it cannot be directly observed. This note explains the methodologies currently used by the South African Reserve Bank to estimate potential output growth and discusses changes to the estimate since the onset of the global financial and economic crisis.

Suggested Citation

  • N Ehlers & L Mboji & M M Smal, 2013. "The pace of potential output growth in the South African economy," Working Papers 5600, South African Reserve Bank.
    • Handle: RePEc:rbz:wpaper:5600
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    File URL: http://www.resbank.co.za/content/dam/sarb/publications/working-papers/2013/5600/WP1301.pdf
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    Citations

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    Cited by:

    1. Konstantin Makrelov & Channing Arndt & Rob Davies & Laurence Harris, 2018. "Fiscal multipliers in South Africa: The importance of financial sector dynamics," WIDER Working Paper Series 006, World Institute for Development Economic Research (UNU-WIDER).
    2. Makrelov, Konstantin & Arndt, Channing & Davies, Rob & Harris, Laurence, 2020. "Balance sheet changes and the impact of financial sector risk-taking on fiscal multipliers," Economic Modelling, Elsevier, vol. 87(C), pages 322-343.
    3. Byron Botha & Franz Ruch & Rudi Steinbach, 2018. "Shortlived supply shocks to potential growth," Working Papers 8605, South African Reserve Bank.
    4. Johannes Hermanus Kemp, 2015. "Measuring Potential Output for the South African Economy: Embedding Information About the Financial Cycle," South African Journal of Economics, Economic Society of South Africa, vol. 83(4), pages 549-568, December.
    5. Johannes W. Fedderke, 2022. "Identifying steady‐state growth and inflation in the South African economy, 1960–2020," South African Journal of Economics, Economic Society of South Africa, vol. 90(3), pages 279-300, September.
    6. Balcilar, Mehmet & Gupta, Rangan & Jooste, Charl & Ranjbar, Omid, 2016. "Characterising the South African business cycle: is GDP difference-stationary or trend-stationary in a Markov-switching setup? - Il ciclo economico del Sud Africa: il PIL è stazion ario alle differenz," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 69(1), pages 33-44.
    7. Cobus Vermeulen, 2023. "The inherent uncertainties in output gap estimation a South African perspective," Working Papers 11051, South African Reserve Bank.
    8. Konstantin Makrelov & Channing Arndt & Rob Davies & Laurence Harris, 2018. "Fiscal multipliers in South Africa: The importance of financial sector dynamics," WIDER Working Paper Series wp-2018-6, World Institute for Development Economic Research (UNU-WIDER).
    9. Byron Botha & Eric Schaling, 2020. "Commodity Prices and Policy Stabilisation in South Africa," Working Papers 10225, South African Reserve Bank.
    10. J. Kemp & B. Smit, 2016. "Estimating and Explaining Changes in Potential Growth in South Africa," Studies in Economics and Econometrics, Taylor & Francis Journals, vol. 40(3), pages 21-38, December.

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