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Fiscal sustainability and the fiscal reaction function for South Africa

How does the South African government react to changes in its debt position? In investigating the question, this paper estimates fiscal reaction functions using various methods (OLS, VAR, TAR, GMM, State-Space modelling and VECM). The paper finds that since 1946 the South African government has ran...

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Bibliographic Details
Main Author: Jooste, Charl
Other Authors: Cuevas, Alfredo, Stuart, Ian, Burger, Philippe
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2011
Series:IMF Working Papers
Subjects:
Fiscal Stance
Interest Rates
Public Debt
Finance
Public Finance & Taxation
Output Gap
Real Interest Rates
Debt Management
Debts, Public
Fiscal Policy
Debt
Production; Economic Theory
Sovereign Debt
Macroeconomics: Production
Banks And Banking
Macroeconomics
Interest Rates: Determination, Term Structure, And Effects
Public Finance
Production And Operations Management
South Africa
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:How does the South African government react to changes in its debt position? In investigating the question, this paper estimates fiscal reaction functions using various methods (OLS, VAR, TAR, GMM, State-Space modelling and VECM). The paper finds that since 1946 the South African government has ran a sustainable fiscal policy, by reducing the primary deficit or increasing the surplus in response to rising debt. Looking ahead, the paper considers the use of fiscal reaction functions to forecast the debt/GDP ratio and gauging the likelihood of achieving policy goals with the aid of probabilistic simulations and fan charts
Physical Description:27 pages
ISBN:9781455227105

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