Impact of Fiscal Consolidation on Government Debt in South Africa: Evidence to Structural and Cyclical Effect
The purpose of this paper is to examine the fiscal consolidation impact on government debt in South Africa (SA) looking at both structural and cyclical effects. The paper employs the Structural Vector Autoregression (SVAR) using time-series data from 1990 to 2020 in South Africa. The key contributio...
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| Format: | Article |
| Language: | English |
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Tripal Publishing House
2024-01-01
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| Series: | Journal of Economics and Financial Analysis |
| Subjects: | |
| Online Access: | https://ojs.tripaledu.com/jefa/article/view/84 |
| _version_ | 1797357104901652480 |
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| author | Eugene Msizi BUTHELEZI |
| author_facet | Eugene Msizi BUTHELEZI |
| author_sort | Eugene Msizi BUTHELEZI |
| collection | DOAJ |
| description | The purpose of this paper is to examine the fiscal consolidation impact on government debt in South Africa (SA) looking at both structural and cyclical effects. The paper employs the Structural Vector Autoregression (SVAR) using time-series data from 1990 to 2020 in South Africa. The key contribution of the paper is it with a focus on the effect of fiscal consolidation as well as investigation of the structural and cyclical component effect of government expenditure cut as well as a tax increase in a developing economy like South Africa. We found that government debt falls as of the result of fiscal consolidation achieved through government expenditure cut. The fiscal consolidation of tax increases is better than based on government expenditure cut. The cyclical component of government expenditure increases domestic government debt. This is also found in the structural government expenditure results in an increase in domestic government debt. |
| first_indexed | 2024-03-08T14:40:00Z |
| format | Article |
| id | doaj.art-af843465b9d14ede8e9c636166d993b6 |
| institution | Directory Open Access Journal |
| issn | 2521-6627 2521-6619 |
| language | English |
| last_indexed | 2024-03-08T14:40:00Z |
| publishDate | 2024-01-01 |
| publisher | Tripal Publishing House |
| record_format | Article |
| series | Journal of Economics and Financial Analysis |
| spelling | doaj.art-af843465b9d14ede8e9c636166d993b62024-01-11T20:10:13ZengTripal Publishing HouseJournal of Economics and Financial Analysis2521-66272521-66192024-01-017212310.1991/jefa.v7i2.a6062Impact of Fiscal Consolidation on Government Debt in South Africa: Evidence to Structural and Cyclical EffectEugene Msizi BUTHELEZI0University of Free StateThe purpose of this paper is to examine the fiscal consolidation impact on government debt in South Africa (SA) looking at both structural and cyclical effects. The paper employs the Structural Vector Autoregression (SVAR) using time-series data from 1990 to 2020 in South Africa. The key contribution of the paper is it with a focus on the effect of fiscal consolidation as well as investigation of the structural and cyclical component effect of government expenditure cut as well as a tax increase in a developing economy like South Africa. We found that government debt falls as of the result of fiscal consolidation achieved through government expenditure cut. The fiscal consolidation of tax increases is better than based on government expenditure cut. The cyclical component of government expenditure increases domestic government debt. This is also found in the structural government expenditure results in an increase in domestic government debt.https://ojs.tripaledu.com/jefa/article/view/84fiscal consolidationstructural and cyclical fiscal consolidationgovernment debt. |
| spellingShingle | Eugene Msizi BUTHELEZI Impact of Fiscal Consolidation on Government Debt in South Africa: Evidence to Structural and Cyclical Effect Journal of Economics and Financial Analysis fiscal consolidation structural and cyclical fiscal consolidation government debt. |
| title | Impact of Fiscal Consolidation on Government Debt in South Africa: Evidence to Structural and Cyclical Effect |
| title_full | Impact of Fiscal Consolidation on Government Debt in South Africa: Evidence to Structural and Cyclical Effect |
| title_fullStr | Impact of Fiscal Consolidation on Government Debt in South Africa: Evidence to Structural and Cyclical Effect |
| title_full_unstemmed | Impact of Fiscal Consolidation on Government Debt in South Africa: Evidence to Structural and Cyclical Effect |
| title_short | Impact of Fiscal Consolidation on Government Debt in South Africa: Evidence to Structural and Cyclical Effect |
| title_sort | impact of fiscal consolidation on government debt in south africa evidence to structural and cyclical effect |
| topic | fiscal consolidation structural and cyclical fiscal consolidation government debt. |
| url | https://ojs.tripaledu.com/jefa/article/view/84 |
| work_keys_str_mv | AT eugenemsizibuthelezi impactoffiscalconsolidationongovernmentdebtinsouthafricaevidencetostructuralandcyclicaleffect |