Micro-simulations of a dynamic supply and use tables economy-wide Leontief-based model for the South African economy
South African Journal of Economic and Management Sciences
| Field | Value | |
| Title | Micro-simulations of a dynamic supply and use tables economy-wide Leontief-based model for the South African economy | |
| Creator | Kavese, Kambale Phiri, Andrew | |
| Description | Background: South Africa has not fully recovered from the 2008 global recession. The World Bank has predicted that South Africa will be one of the worst performers in sub-Saharan Africa in 2020 with tepid growth of 1.3% which is far below the National Development Plan targets growth of 5.4% required a year to reduce unemployment, create decent jobs and generate enough revenue for social development.Aim: We aim to examine whether changes in the components of final demand (changes in government spending, household consumption expenditure, exports, investment spending) have a considerable effect on the sector’s gross value added, job creation and tax revenue generation and whether there were changes in the exogenous final demand in die post-recession period.Setting: We focus on building supply and use tables based on 62 different sectors of the South African economy.Methods: An economy-wide Leontief multiplier-based model calibrated on a supply and use framework and a micro-simulation model is used to assess post-recession trends in macroeconomic, labour and fiscal multipliers for South Africa.Results: The simulations show that during the post-recession era, the effect of exogenous shock in the economy, like an increase in investment spending, although positive, yields a smaller return in terms of tax revenue, job creation and economic growth. At sector level, the results show that the inter-industry links and industry-consumer links have therefore weakened.Conclusion: Our findings imply that the persisting low growth trajectory associated with weaker inter-industry linkages could be exacerbated, while the fiscal austerity measures associated with weaker forward and backword tax linkages could be prolonged. We recommend government should follow a priorities-based spending policy that yields optimal socioeconomic returns. | |
| Publisher | AOSIS Publishing | |
| Date | 2020-11-20 | |
| Identifier | 10.4102/sajems.v23i1.3431 | |
| Source | South African Journal of Economic and Management Sciences; Vol 23, No 1 (2020); 13 pages 2222-3436 1015-8812 | |
| Language | eng | |
| Relation |
The following web links (URLs) may trigger a file download or direct you to an alternative webpage to gain access to a publication file format of the published article:
https://sajems.org/index.php/sajems/article/view/3431/2219
https://sajems.org/index.php/sajems/article/view/3431/2218
https://sajems.org/index.php/sajems/article/view/3431/2220
https://sajems.org/index.php/sajems/article/view/3431/2217
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