Macro-fiscal analysis and policy modelling

South Africa’s economy experienced a particularly steep decline —relative to other emerging markets— during the 2009 Global Financial Crisis. These economic challenges were exacerbated by the COVID-19 pandemic and impact South Africa’s ability to expand health coverage, decrease unemployment, and increase start-up and entrepreneurship rates.

The work stream on Macro-fiscal analysis and policy modelling will improve policymakers’ and institutions’ abilities to carefully assess the risks and opportunities of the macroeconomic policies intended to solve South Africa’s economic problems. Through its efforts to improve the macroeconomic modeling capacity of the institutions responsible for economic policy, the work stream will strengthen decision-making and contribute to broader economic stability and growth in South Africa.

Additional work includes:

  • evaluation of coordination between macroeconomic policy components: their impact on each other and overall macroeconomic outcomes
  • evaluation of the conduct of fiscal policy against its stated objectives
  • evaluation of the Reserve Bank’s conduct of monetary policy against its stated objectives
  • improving our ability to model reality in macro simulations
  • estimation of the determinants of the yield curve and optimal debt management

Outputs

One of the primary goals of this work stream is to improve the flow of information from academics working on policy-relevant and evidence-based research to actual policymakers. As a continuation of SA-TIED Phase I, the macro-fiscal work stream will focus on four broad areas of policy:

  • fiscal policy (public investment and debt, tax policy, and expenditure)
  • monetary policy (including inflation targeting and exchange rate policy)
  • micro- and macroprudential policy
  • coordination of macroeconomic policy and its impact on savings, investment, and the balance of payments
Blog
Philippe Burger
Introduction The South African constitution includes a number of socioeconomic rights, such as the right to education and access to housing, food, and healthcare. Nevertheless, the constitution qualifies some of the socioeconomic rights by the...
November 2023
Macro-fiscal analysis
Working paper
Philippe Burger
The South African constitution is considered progressive and transformative in intention due to its inclusion of socioeconomic rights, such as the right to education, land, food, and healthcare. However, some of these rights are qualified...
October 2023
Macro-fiscal analysis
News
SA-TIED
SA-TIED marked a significant milestone on 13 October 2023, by hosting an inaugural National Treasury Secure Data Facility (NTSDF) data lab roadshow at the University of Pretoria . The event featured a presentation by the...
October 2023
Enterprise development
Public revenue
Labour market and inequality
Macro-fiscal analysis
Climate and energy
Reform implementation
Working paper
Gideon du Rand, Hylton Hollander, and Dawie van Lill
A critical requirement for efficient fiscal policy is a reliable understanding of its impact on the aggregate economy for different policy instruments and under different economic conditions. Indeed, there is strong evidence to suggest that...
AUGUST 2023
Macro-fiscal analysis
Working paper
Krige Siebrits and Estian Calitz
This paper discusses the rationale and options for a fiscal anchor for South Africa and its potential for restoring and maintaining fiscal sustainability. It argues that a well designed fiscal anchor can be useful in...
AUGUST 2023
Macro-fiscal analysis
Working paper
Gideon du Rand, Hylton Hollander, and Dawie van Lill
In this study, we provide a comprehensive estimation of the contemporary Phillips curve relationship in the South African economy using a novel deep learning technique. Our approach incorporates multiple measures of economic slack/tightness and inflation...
June 2023
Macro-fiscal analysis
Technical workshop
22 Mar 2023 / 11:00 to 16:00
Macro-fiscal analysis
Date: Wednesday, 22 March 2023 Time: 11:00–16:00 GMT +2 Location: Online On 22 March, the United Nations University World Institute for Development Economics Research (UNU-WIDER) and the National Treasury of South Africa will host a...
Working paper
Ihsaan Bassier, Joshua Budlender, and Maya Goldman
Up-to-date, nationally representative household income/expenditure data are crucial to estimating poverty during the COVID-19 pandemic and to policy-making more broadly, but South Africa lacks such data. We present new pandemic poverty estimates, simulating incomes in...
July 2022
Macro-fiscal analysis
Working paper
Roy Havemann and Hylton Hollander
South Africa runs a primary fiscal deficit and the long-term interest rate on government borrowing, is greater than the long-term economic growth rate, Without intervention, debt will continue to rise until there is a disorderly...
June 2022
Macro-fiscal analysis
Working paper
Patrick Honohan and Athanasios Orphanides
This paper reviews South Africa’s monetary policy since 2007 and makes recommendations towards improving the inflation-targeting framework currently in place. Following a surge in inflation into double digits in 2007/08, the South African Reserve Bank...
March 2022
Macro-fiscal analysis
News
SA-TIED
To showcase key lessons from SA-TIED phase I, the programme produced a series of eight videos that feature the major accomplishments from each of the six work streams and the data lab. Watch all eight...
February 2022
Enterprise development
Public revenue
Labour market and inequality
Macro-fiscal analysis
Climate and energy
Reform implementation
Phase 1 regional growth
Working paper
Ricardo Hausmann, Federico Sturzenegger, Patricio Goldstein, Frank Muci, and Douglas Barrios
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...
February 2022
Macro-fiscal analysis
Report
SA-TIED
This report is a summary of the SA-TIED programme’s major research contributions to the policy environment. These contributions are not policy proposals, but are meant to inform the policymaking process and fill important gaps in...
January 2022
Enterprise development
Public revenue
Macro-fiscal analysis
Labour market and inequality
Climate and energy
Phase 1 regional growth
Working paper
Hylton Hollander
Debt-financed fiscal stimulus programmes directly stimulate aggregate demand through government expenditure or tax cuts, but their effectiveness is highly dependent on direct crowding out of private sector expenditure, spillover effects to the private sector through...
October 2021
Macro-fiscal analysis
In the media
SA-TIED
During a speech to parliament on Thursday, South Africa’s Finance Minister, Tito Mboweni, discussed the important work being carried out by the Southern Africa – Towards Inclusive Economic Development (SA-TIED) programme. Mboweni highlighted the achievements...
May 2021
Enterprise development
Public revenue
Labour market and inequality
Macro-fiscal analysis
Climate and energy
Reform implementation