South Africa's economy driven by supply shocks, inflation impacted by demand.
The article examines supply and demand shocks in the South African economy from 1960 to 2020. It focuses on how these shocks affect growth and inflation. The researchers found that supply shocks mainly impact growth, while demand shocks mainly affect inflation. Negative supply shocks decrease growth and increase inflation, while positive demand shocks only increase inflation. The study suggests that South Africa is not heavily influenced by international productivity shocks.