The Unorthodox Response of the South African Economy to Changes in Macroeconomic Policy

Charles Harvey and Carolyn Jenkins
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Charles Harvey: University of Sussex
Carolyn Jenkins: University of Natal

Chapter 9 in Economics in a Changing World, 1994, pp 195-222 from Palgrave Macmillan

Abstract: Abstract In response to a fall in the rate of growth of gross domestic product (GDP) in the mid-1970s, the South African government eventually, in the 1980s, allowed the nominal exchange rate to fall and tried to achieve a positive real cost of borrowing. The response to these policy changes should have been more rapid growth of exports, especially labour-intensive exports, and a greater use of labour throughout the economy. Indeed, exports did grow fast after the change in exchange rate policy in 1983, but they were already growing fast before that change. Moreover, export growth after the policy change was mainly in capital-intensive products; and the economy did not shift to using more labour. By the end of the 1980s, less than 10 per cent of those entering the labour force were getting formal-sector jobs.

Keywords: Exchange Rate; Gross Domestic Product; Real Exchange Rate; Trading Partner; Real Interest Rate (search for similar items in EconPapers)
Date: 1994
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DOI: 10.1007/978-1-349-23458-5_9

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