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A Historical CGE Simulation of the South African Economy from 2006–2013: Analysing Changes in the Use of Primary Factors by Industries

Heinrich Bohlmann () and Marthinus Breitenbach ()

No 201405, Working Papers from University of Pretoria, Department of Economics

Abstract: This paper uses a dynamic CGE model to help explain some apparent contradictions between changes in the structure of the South African economy and movements in related variables over the 2006 to 2013 period. Most notably, an increase in the capital-labour ratio was identified, despite a relative increase in the price of capital rentals. To calibrate this result with conventional economic theory suggests that a change in the preferred capital-labour ratio of industries must have occurred. We quantify this change and comment on what this means for policymakers trying to reduce the country’s high level of unemployment. Other changes to the economy over this period are also quantified and explained.

Keywords: CGE Simulation; South African Economy; Analysing changes; Primary Factors (search for similar items in EconPapers)
Pages: 16 pages
Date: 2014-02
New Economics Papers: this item is included in nep-afr, nep-cmp and nep-his
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