The many practical economic and political difficulties encountered in
discretionary fiscal stabilisation policy highlight the potential benefits of
allowing automatic fiscal stabilisers to operate over the cycle. This article
investigates the relevance of tax revenue as an automatic fiscal stabiliser in the
South African economy by an empirical analysis of its role and impact since the
1970s. The study finds that cyclical changes in tax revenue are relatively small
and provide no significant evidence of automatic stabilisation; however, the
potential of this tool as an effective automatic fiscal stabiliser in South Africa
cannot be overlooked as results show a high correlation between the output gap
and automatic stabiliser estimates. Automatic fiscal stabilisers were employed
symmetrically over the cycle and results showed that automatic fiscal stabilisers
became increasingly important towards the end of the sample period.
Jibao, Samuel Sangawulo; Naraidoo, Ruthira; Schoeman, N.J. (Nicolaas Johannes)(University of Pretoria, Department of Economics, 2010-10)
In addition to the conventional linear cointegration test, this paper tests the asymmetry relationship between revenue and expenditure i.e. making a distinction between the adjustment of positive (budget surplus) and ...
Jibao, Samuel Sangawulo; Schoeman, N.J. (Nicolaas Johannes); Naraidoo, Ruthira(Department of Economics, University of Pretoria, 2012)
In addition to the conventional linear cointegration test, this paper tests the asymmetry relationship between
fiscal revenue and expenditure, by making a distinction between the adjustment of positive (budget surplus)
Swanepoel, J.A.; Schoeman, N.J. (Nicolaas Johannes)(Faculty of Economic and Management Sciences, University of Pretoria, 2003-12)
As actual budget balances reflect both cyclical developments and discretionary
measures, they are not very useful when seeking to assess the orientation of
underlying fiscal policy and possible structural imbalances in ...