Estimating potential output and capacity utilisation for the South African economy

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Periodical article

Title:	Estimating potential output and capacity utilisation for the South African economy
Authors:	Du Toit, Charlotte Moolman, Elna
Year:	2003
Periodical:	South African Journal of Economics
Volume:	71
Issue:	1
Pages:	96-118
Language:	English
Geographic term:	South Africa
Subjects:	productivity industry
External link:	https://onlinelibrary.wiley.com/doi/10.1111/j.1813-6982.2003.tb00073.x/pdf
Abstract:	Measuring productive potential and the deviation between potential and actual output (i.e. the output gap) provides a number of key insights into macroeconomic performance. In this study, a measure for potential output and an associated output gap (capacity utilization) are determined with the objective of incorporating them in an extended supply-side model of the South African economy. South Africa's non-accelerating wage rate of unemployment and potential output and output gap are estimated. Two techniques are used in this empirical analysis: are the Hodrick-Prescott filter, a time-series method, and the estimation of potential output, a structural approach based on a production function relationship. The obtained results for potential output suggest a number of impediments in the South African economy: the South African potential to grow is seemingly deteriorating. Bibliogr., notes, ref. [ASC Leiden abstract]