CoPS/IMPACT Working Paper Number G-109

Title: The Macroeconomic, Industrial, Distributional and Regional Effects of Government Spending Programs in South Africa

Authors: J. Mark Horridge, Brian R. Parmenter, Martin Cameron, Riaan Joubert, Areef Suleman and Dawie de Jongh


A computable general equilibrium model of the South African economy (IDC-GEM) is outlined. The model is used to analyse the effects on the economy of increases in government spending such as are at the core of the new government's Reconstruction and Development Program. The analysis concentrates on the implications of alternative methods of finance for the program. Results are reported for macroeconomic variables, for the prospects of industries and regions, and for income distribution.

JEL classification: C68, D31, E62, O55, R13

Keywords: economic modelling, South Africa, government spending, income distribution, industrial effects, regional effects, macroeconomic effects

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