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dc.contributor.authordu Plessis, Stan
dc.contributor.authorSmit, Ben
dc.contributor.authorSturzenegger, Federico
dc.date.accessioned2020-11-10T13:09:23Z
dc.date.issued2008-05
dc.identifier.citationdu Plessis, Stan, Ben Smit, and Federico Sturzenegger. “The Cyclicality of Monetary and Fiscal Policy in South Africa since 1994.” CID Working Paper Series 2008.163, Harvard University, Cambridge, MA, May 2008.en_US
dc.identifier.urihttps://nrs.harvard.edu/URN-3:HUL.INSTREPOS:37366170*
dc.description.abstractThis paper uses an SVAR approach to discuss the cyclicality of fiscal and monetary policy in South Africa since 1994. There is substantial South African literature on this topic, but much disagreement remains. Though not undisputed, there is growing consensus that monetary policy has contributed to the remarkable stabilization of the South African economy over this period. The evaluation of the role of fiscal policy in stabilization has been less favorable and there is little evidence that a countercyclical fiscal stance was a priority over this period. This paper considers these issues in an empirical framework that addresses some of the shortcomings in the literature. Specifically, it constructs a structural model in contrast with the reduced form models typically used in the South African literature, incorporates the dynamic interaction between monetary and fiscal shocks on the demand side and supply shocks on the other, and avoids controversy over ‘neutral’ base years and the size of fiscal elasticities. The model confirms the consensus on monetary policy, finding it to have been largely countercyclical since 1994. On fiscal policy, this paper finds evidence of pro-cyclicality, especially in the more recent period, though the policy simulations suggest that the pro-cyclicality of fiscal policy has had little destabilizing impact on real output.en_US
dc.language.isoen_USen_US
dc.publisherCenter for International Development at Harvard Universityen_US
dc.relation.isversionofhttps://www.hks.harvard.edu/centers/cid/publicationsen_US
dash.licenseLAA
dc.titleThe Cyclicality of Monetary and Fiscal Policy in South Africa since 1994en_US
dc.typeResearch Paper or Reporten_US
dc.description.versionAccepted Manuscripten_US
dc.relation.journalCID Working Paper Seriesen_US
dc.date.available2020-11-10T13:09:23Z
dash.contributor.affiliatedSturzenegger, Federico


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