Externally constrained growth: Testing the applicability of Thirlwall’s law in South Africa

Figures & data

Figure 1. South African Trade Balance from 1960 to 2009. Noted Y axis are in millions of rands.

Figure 2. Export and Output Growth Rates from 1960 to 2016.

Figure 3. Growth Rate of the Real Exchange Rate.

Figure 4. Real Exchange rate and Output movements.

Table 1 . Unit Root Test for stationarity.

Variables	Variables at level	Variables at first difference
	ADF	ADF
Lmt	0.8155	0.0000**
Lgdp	0.2173	0.0003**
Lrer	0.9296	0.0000**

** 5% level of significance

Table 2 . South Africa – Calculations of the growth rate consistent with the growth rate of the balance of payments equilibrium.

Years	Actual Average Growth Rate (Ga)	Estimated Growth of balance of payment equilibrium ($y_{Bt}$)
1960–1969	5.49	2,99
1970–1979	3.25	2,17
1980–1989	2.24	2,52
2000–2009	3.61	1.26

Table 3 . South Africa – Calculations of the growth rate consistent with the growth rate of the balance of payments equilibrium adjusted for structural breaks.

Years	Adjusted Actual Average Growth Rate (Ga)	Adjusted Estimated Growth of balance of payment equilibrium ($y_{Bt}$)
1960–1969	5.49	2,99
1974–1979	2,78	3,98
1980–1989	2,24	2,52
1990–1994	0,20	3,58
1996–1999	2,45	3,80
2000–2009	3,61	1,09

Table 4 . Results of the Wald Test.

Variable	Without structural breaks		With structural breaks
	Coefficient	p-value	coefficient	p-value
$\left(y_{Bt}\right)$	0.66	0.64	1.59	0.51
Wald Test $H_O:$ (a = 0 and b = 1)	0.3727	0.5479