Autonomous Expenditure Multipliers and Gross Value Added in South Africa

Arkadiusz Derkacza, Santos Bila and Sodiq Arongundadec
Additional contact information
Arkadiusz Derkacza: Institute of Economics, University of Social Sciences, Warsaw, Poland
Santos Bila: College of Business and Economics, University of Johannesburg
Sodiq Arongundadec: College of Business and Economics, University of Johannesburg

Economics Working Papers from College of Business and Economics, University of Johannesburg, South Africa

Abstract: This study answers two main questions. What are the South African fiscal, export, and investment multipliers? Is obtaining the impact of autonomous expenditure on gross value-added growth rate possible? In answering these questions, we use the principle of aggregate demand and data spanning 1992 to 2019. The results suggest that autonomous expenditure multipliers exert a positive effect on the change in gross value added. These multipliers are however driven by several factors. First, the import intensity level - the import intensities of each autonomous expenditure reduce their significance. This means that the leakage of aggregate demand in the form of expenditure on the purchase of imported goods increases. Secondly, the value of the fiscal, investment and export multipliers is determined by the propensity for total private consumption. The value of the propensity for total private consumption depends on the household income taxes and the propensity to save. An increase in these two ratios decreases the value of the propensity to private consumption. This indicates that the leakage of aggregate demand is driven by a decline in total private consumption in the economy, and this may be caused by an increase in savings and/or an increase in the average household income tax.

Keywords: Fiscal multiplier; export multiplier; investment multiplier; GVA; South Africa (search for similar items in EconPapers)
JEL-codes: E0 E12 E20 E63 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2022, Revised 2022
New Economics Papers: this item is included in nep-afr and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://edwrg.education/RePEc/ady/wpaper/w4_2022.pdf First version, 2022 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to edwrg.education:443 (No such host is known. )

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ady:wpaper:edwrg-04-2022

Access Statistics for this paper

More papers in Economics Working Papers from College of Business and Economics, University of Johannesburg, South Africa
Bibliographic data for series maintained by Frederich Kirsten (fkirsten@uj.ac.za).