Exploring unbalanced growth: Understanding the sectoral structure of the South African economy

This paper presents empirical evidence in support of an account of unbalanced growth in the South African economy: an interaction between sectorally differentiated total factor productivity growth, with a price elasticity of demand below unity. As sectors with faster TFP growth produce more real output over time, their relative prices fall, with the price changes triggering increases in consumption demand that less than offset the price fall. As...