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Macroeconomic risks after a decade of microeconomic turbulence: South Africa 2007-2020

Author

Listed:
  • Douglas Barrios

    (Center for International Development at Harvard University)

  • Federico Sturzenegger
  • Frank Muci

    (Center for International Development at Harvard University)

  • Patricio Goldstein

    (Center for International Development at Harvard University)

  • Ricardo Hausmann

    (Harvard's Growth Lab)

Abstract

This study analyses the performance of macroeconomic policy in South Africa in 2007–2020 and outlines challenges for policy in the coming decade. After remarkable economic growth in 1997–07, South Africa’s progress slowed dramatically in 2009 with the global financial crisis. Real GDP growth decelerated more than in other emerging markets and mineral exporting peers and never recovered pre-crisis levels. In addition, the budget deficit that provided counter-cyclical support to the economy was never reigned in, leading to a rapidly rising public debt load. The study assesses three accounts of South Africa’s post-GFC growth and fiscal slump: (1) an external story; (2) a macro story; and (3) a microeconomic story. Evidence of strong linkages between micro-and political developments and growth performance is provided.

Suggested Citation

  • Douglas Barrios & Federico Sturzenegger & Frank Muci & Patricio Goldstein & Ricardo Hausmann, 2022. "Macroeconomic risks after a decade of microeconomic turbulence: South Africa 2007-2020," CID Working Papers 404, Center for International Development at Harvard University.
    • Handle: RePEc:cid:wpfacu:404
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    References listed on IDEAS

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    Cited by:

    1. Barry Eichengreen & Ricardo Hausmann & Ugo Panizza, 2023. "Yet it Endures: The Persistence of Original Sin," Open Economies Review, Springer, vol. 34(1), pages 1-42, February.
    2. Kishan Shah, 2022. "Diagnosing South Africa’s High Unemployment and Low Informality," Growth Lab Working Papers 193, Harvard's Growth Lab.
    3. Sarb, 2023. "Occasional Bulletin of Economic Notes 2301 combined," Occasional Bulletin of Economic Notes 11043, South African Reserve Bank.
    4. Kishan Shah, 2022. "Diagnosing South Africa’s High Unemployment and Low Informality," CID Working Papers 138a, Center for International Development at Harvard University.

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    Keywords

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    JEL classification:

    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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