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Debt-financed fiscal stimulus in South Africa

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  • Hylton Hollander

Abstract

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 a higher risk premium on interest rates, and the interaction between fiscal policy and monetary policy.

Suggested Citation

  • Hylton Hollander, 2021. "Debt-financed fiscal stimulus in South Africa," WIDER Working Paper Series wp-2021-152, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2021-152
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    1. repec:rbz:oboens:11031 is not listed on IDEAS
    2. Kathryn Bankart & Xolani Sibande & Konstantin Makrelov, 2023. "Drivers of corporate credit in South Africa," Occasional Bulletin of Economic Notes 11047, South African Reserve Bank.
    3. Gideon du Rand & Hylton Hollander & Dawie van Lill, 2023. "Time-varying fiscal multipliers for South Africa: A large time-varying parameter vector autoregression approach," WIDER Working Paper Series wp-2023-106, World Institute for Development Economic Research (UNU-WIDER).

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    Keywords

    Public debt; Interest rate; Fiscal sustainability; Fiscal policy; Monetary policy;
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