• Login
View Item 
  • DASH Home
  • Harvard Kennedy School
  • HKS Center for International Development
  • View Item
  • DASH Home
  • Harvard Kennedy School
  • HKS Center for International Development
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

Browse

All of DASH
  • Communities & Collections
  • By Issue Date
  • Author
  • Title
  • Keyword
  • FAS Department
This Collection
  • By Issue Date
  • Author
  • Title
  • Keyword

Submitters

  • Login
  • Quick submit
  • Waiver Generator

About

  • About DASH
  • DASH Stories
  • DASH FAQs
  • Accessibility
  • COVID-related Research
  • Terms of Use
  • Privacy Policy

Statistics

  • By Schools
  • By Collections
  • By Departments
  • By Items
  • By Country
  • By Authors

South Africa: Macroeconomic Challenges after a Decade of Success

 
Thumbnail
View/Open
133.pdf (1.748Mb)
Author
Frankel, JeffreyHARVARD
Smit, Ben
Sturzenegger, Federico
Published Version
https://www.hks.harvard.edu/centers/cid/publications
Metadata
Show full item record
Citation
Frankel, Jeffrey, Ben Smit, and Federico Sturzenegger. “South Africa: Macroeconomic Challenges after a Decade of Success.” CID Working Paper Series 2006.133, Harvard University, Cambridge, MA, September 2006.
Abstract
The South African economy has been doing well. Capital inflows and the rand have been strong, growth was high in 2005, the budget is relatively healthy, and inflation rates and interest rates are low. As democracy continues to consolidate, there are plenty of grounds for optimism. Is the job done, or do these achievements open the door to new challenges? What are the risks in the horizon? And how does the government’s ASGI-SA strategy deal with the challenges? This report provides four areas of analysis: an analysis of the current account, the consistency of the ASGI-SA program, the benefits of the current fiscal-macro policy mix and the choice of exchange rate regime. We suggest that ASGI-SA relies too heavily on capital accumulation, in a way that other growth accelerations have not. In addition there are grounds for doubt whether the required jump in investment will be forthcoming, and for worry by how much it would deteriorate South Africa's current account deficit. South Africa would suffer less from a sudden stop of capital inflows than would other emerging economies, particularly because most of the inflows do not take the form of debt denominated in foreign currency. Nevertheless, the already-large current account deficit is worrisome. South Africa is still exposed to a possible a sudden stop, particularly one triggered by a reversal of the global climate for mineral commodities and emerging markets generally. We offer some proposals for reducing this vulnerability. They include avoidance of pro-cyclical fiscal policy and active intervention by the monetary authorities to build up reserves and dampen real exchange rate appreciations.
Terms of Use
This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAA
Citable link to this page
http://nrs.harvard.edu/urn-3:HUL.InstRepos:42482331

Collections
  • HKS Center for International Development [534]

Contact administrator regarding this item (to report mistakes or request changes)

Follow us on TwitterFollow us on FacebookFollow us on Google+

e: osc@harvard.edu

t: +1 (617) 495 4089

f: +1 (617) 495 0370

© 2018 President and Fellows of Harvard College
  • DASH
  • ETDs@Harvard
  • Copyright First Responders
  • HOPE
  • Contact
  • Harvard Library
  • Harvard University