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Fiscal Sustainability in South Africa: Recent Evidence

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  • Elvis Munyaradzi Ganyaupfu

Abstract

The objective of this study was to analyse how the South African government historically reacted to its public debt position during the sample period 1990-2013. Following diagnostic evaluation of the stationarity and coi ntegration properties of the data series, a fiscal reaction function was estimated to examine whether the government’s fiscal policies were consistent with the intertermporal government budget constraint. A standard three-variable framework of the Vector Error Correction Model (VECM) was applied using E-views. The results provide evidence that the government indeed ran a sustainable fiscal policy during the sample period explored by adjusting the primary deficit or surplus in response to changes in its debt positions.

Suggested Citation

  • Elvis Munyaradzi Ganyaupfu, 2014. "Fiscal Sustainability in South Africa: Recent Evidence," Journal of Social Economics, Research Academy of Social Sciences, vol. 1(4), pages 159-167.
    • Handle: RePEc:rss:jnljse:v1i4p2
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    References listed on IDEAS

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