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

Christopher Malikane

Journal of Developing Areas, 2010, vol. 44, issue 1, 187-200

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.

Keywords: Rate of profit; long cycles; unemployment rate; capital accumulation; income distribution (search for similar items in EconPapers)
JEL-codes: B14 B24 O40 P16 (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:jda:journl:vol.44:year:2011:issue1:pp:187-200

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