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Analysing the Effects of Fiscal Policy Shocks in the South African Economy

Charl Jooste, Guangling (Dave) Liu and Ruthira Naraidoo
Authors registered in the RePEc Author Service: Guangling Liu () and Ruthira Naraidoo ()

No 351, Working Papers from Economic Research Southern Africa

Abstract: This paper is the first one to analyse the effect of aggregate government spending and taxes on output for South Africa using three types of a calibrated DSGE model and more data driven models such as a structural vector error correction model (SVECM) and a time-varying parameter VAR (TVP-VAR) to capture possible asymmetries and time variation of fiscal impulses. The impulse responses indicate first, that increases in government expenditure have a positive impact, albeit (at times) less than unity, on GDP in the short run; second, over the long run, the impact of government expenditure on GDP is insignificant; and third, increases in taxes decreases GDP over the short run, while having negligible effects over longer horizons.

Keywords: Rule-of-thumb consumers; Fiscal multiplier; Government spending; TVP-VAR; SVECM (search for similar items in EconPapers)
JEL-codes: C54 D58 E32 E62 H31 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2013
New Economics Papers: this item is included in nep-afr, nep-dge and nep-pbe
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Citations: View citations in EconPapers (11) Track citations by RSS feed

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https://www.econrsa.org/node/720 (application/pdf)

Related works:
Journal Article: Analysing the effects of fiscal policy shocks in the South African economy (2013) Downloads
Working Paper: Analysing the Effects of Fiscal Policy Shocks in the South African Economy (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:rza:wpaper:351

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