Fiscal Policy Shocks and Macroeconomic Growth in South Africa

1 Introduction

2 Synopsis of Fiscal Policy in South Africa: 1994-2020

Part I Effect of Government Debt Dynamics

3 Effects of Government Debt on Output, Household Consumption, and Gross Fixed Capital Formation: Role of the Credit Conditions Channel4 Government Debt and Household Consumption: The Influence of the Wealth Channel



5 Government Debt and Capital Formation Nexus in South Africa: The Role of the Debt Threshold

6 Government Debt and Fixed Capital Formation Nexus: Effects of the Interest Rate and Monetary Policy Credibility Channels

7 Inflation Targeting Band, the Government Debt, and Capital Formation Nexus in South Africa8 Do High Government Debt-to-GDP Regimes Propagate the Adverse Macroeconomic Effects of High Budget Deficit Regimes?



9 Government Debt-to-GDP Ratio, Investment Growth and Employment Growth, and Their Response to High Nominal GDP Growth Regimes

10 The Impact of the Government Debt-to-GDP Ratio on Investment Growth

Part II The Effects of Fiscal Budget Balance Deficits Dynamics11 Budget Balance Deficit Thresholds and Their Macroeconomic Impact



12 The Impact of a Persistent Increase in the Budget Deficit on Real Interest Rates

13 What Are the Effects of Budget Balance Deficit Regimes on Inflation and Inflation Expectations?

Part III The Effects of Interest Rates and Debt Service Cost of Government Debt14 Widening Budget Deficits and Investment Growth Dynamics



15 Do High Government Debt Service Costs Reduce the Potency of Accommodative Fiscal Policy in South Africa?

16 What Are the Macroeconomic Effects of a Positive Interest Rate-GDP Growth Differential Shock?

Part IV Macroeconomic Effects of Economic Policy Uncertainty on Government Borrowing Costs, Employment Growth and the Role of Monetary Policy17 Economic Policy Uncertainty and the Employment Dynamics in South Africa

Eliphas Ndou is a Senior Lecturer in Economics at the University of South Africa. He has worked as an economist at the South African Reserve Bank and has authored books on international finance, fiscal policy, monetary, labour, macro and microeconomics, banking regulation, and macro-prudential policy.

Nombulelo Gumata is an Economist. She worked at the South African Reserve Bank and has authored several books on international finance and macroeconomics, macro-prudential and regulatory tools and financial stability, labour markets, and monetary, and fiscal policy.