More than halfway through the decade, the South African economy has done very well. This report asks whether such achievements provide grounds for complacency. In particular it discusses the current account challenge in light of the Accelerated and Shared Growth Initiative for South Africa (ASGI-SA) program. Our assessment is that a cautionary note on the need to reduce external imbalances is needed. We provide policy recommendations to minimize the negative impact of a possible sudden stop of capital inflows. On the consistency of ASGI-SA program, we note that, given South Africa's recent employment and productivity performance a large investment program would be required to deliver the desired growth rates. In our view this imposes a large burden on public investment and on the current account itself. Copyright (c) 2008 The Authors. Journal compilation (c) 2008 The European Bank for Reconstruction and Development.
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Article provided by The European Bank for Reconstruction and Development in its journal Economics of Transition.
Volume (Year): 16 (2008) Issue (Month): 4 (October) Pages: 639-677 Download reference. The following formats are available: HTML
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Ricardo J. Caballero & Arvind Krishnamurthy, 2004.
"Inflation Targeting and Sudden Stops,"
NBER Chapters,
in: The Inflation-Targeting Debate, pages 423-446
National Bureau of Economic Research, Inc.
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