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Output, Employment and Financial Sanctions in South Africa
Author:
Mr. Tamim Bayoumi
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Series:
IMF Working Papers
Volume/Issue:
Volume 1990: Issue 113
Language:
English
Publication Date:
01 Dec 1990
DOI:
https://doi.org/10.5089/9781451943948.001
ISBN:
9781451943948
ISSN:
1018-5941
Pages:
28
Keywords:
WP; production function; nonwhite employment; real wage rate; nonwhite labor force; nonwhite wage; nonwhite real wage growth; output ratio; Employment; Real wages; Labor force; Stocks; Africa
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IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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The effects of the marked slowdown in the growth of the capital stock in South Africa since 1985, associated with political uncertainty and financial sanctions, and future growth prospects are quantified using a modified version of the Lewis development model. This is done by estimating production functions for the nonprimary and mining sectors of the South African economy involving skilled (white) labor, unskilled (nonwhite) labor and capital. It is concluded that each 1 percent change in the growth rata of the capital stock leads to at 0.8 percent change in output growth, and hence the fall in investment since 1985 has lead to significant falls in growth, employment and real wages.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund