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Title
The countercyclicality of fiscal policy in South Africa since 1994 |
Full text
http://upetd.up.ac.za/thesis/available/etd-04022013-175509/ |
Date
2013 |
Author(s)
Maidi, Mohloriseng Athelia Mmatshepo |
Contributor(s)
Dr J Rossouw |
Abstract
This study uses a simple univariate regression model to assess the cyclicality of fiscal policy, based on government expenditure, in South Africa since 1994. The model suggests that that total government expenditure is highly procyclical, indicating that government spending responds positively to economic growth. The results from similar regression focusing on components of government spending suggests that only capital spending (economic classification) and general services (functional classification) are countercyclical, while other classifications are more procyclical in line with total government spending. The procyclicality of expenditure components such as compensation of employees, goods and services and all functional classification is in line with governments decisions to reduce taxes in order to boost economic activities during periods of recessions, coupled with South Africas high public wage bill. The countercyclicality of capital spending is attributed to government's view on prioritising capital projects during periods of recession, in line with the Keynesian theory. Results of procyclicality confirm most of other empirical findings on South Africas fiscal policy. However, this suggests that the procyclicality of South Africas government expenditure plays only a small role in demand management and therefore stabilising aggregate demand or economic fluctuations. © 2012 University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. Please cite as follows: Maidi, MAM 2012, The countercyclicality of fiscal policy in South Africa since 1994, MBA dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://upetd.up.ac.za/thesis/available/etd-04022013-175509/ > F13/4/369/zw |
Subject(s)
Gordon Institute of Business Science |
Language
en-uk |
Publisher
University of Pretoria |
Type of publication
text |
Format
application/pdf |
Source
http://upetd.up.ac.za/thesis/available/etd-04022013-175509/ |
Rights
unrestricted; I hereby certify that, I have obtained and attached hereto a written permission statement from the owner(s) of each third party copyrighted matter to be included in my thesis, dissertation, or project report ( |
Repository
Pretoria - University of Pretoria, Theses and Dissertations
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Added to C-A: 2017-03-10;15:13:06 |
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