Identifying steady-state growth and inflation in the South African economy, 1960–2020

This paper employs a simple but general representation of an economy, in order to derive mutually consistent estimates of steady-state growth and inflation for South Africa over the period from 1960Q1 through to 2020Q2, as well as the implied “gaps” between actual growth and inflation and their steady-state values. Analysis is under both closed and open economy frameworks. Moreover, the full sample is partitioned in subsamples either ex ante by decade or endogenously from structural breaks implied by the univariate time series characteristics of the data.