Author

  • Tshembhani Mackson HLONGWANE

    • School of Economics and Management, University of Limpopo, South Africa
    • South Africa

  • Itumeleng Pleasure MONGALE

    • School of Economics and Management, University of Limpopo, South Africa
    • South Africa

  • Lavisa TALA

    • School of Economics and Management, University of Limpopo, South Africa
    • South Africa

Abstract

Fiscal policy ensures macroeconomic stability as a precondition for growth at the macro level. This study investigates the impact of fiscal policy on economic growth of South Africa from 1960 to 2014 through a Cointegrated Vector Autoregression approach. It seeks to contribute to the existing literature as well as in designing effective fiscal policy programmes which can propel economic performance. Theresults of the long run estimates revealed that government tax revenue has a positive and significant long run influence on economic growth, whereas the government gross fixed capital formation and budget deficit have a negative impact on real GDP. For that reason, the study recommends that some expansionary fiscal policy measures should be strengthened since they play a very important role in the economy so as to meet the government target of the National Development Plan Vision for 2030.

Keywords

References

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How to Cite

HLONGWANE, T. M., MONGALE, I. P., & TALA, L. (2018). Analysis of the Impact of Fiscal Policy on Economic Growth in South Africa: VECM Approach. Journal of Economics and Behavioral Studies, 10(2(J), 231-238. https://doi.org/10.22610/jebs.v10i2(J).2232

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Research Paper

Published in

Vol. 10 No. 2(J) (2018) Work, Skills & Economic Policy in African Markets View issue contents

Published

2018-05-19

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