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Erschienen in:
2017 | OriginalPaper | Buchkapitel
1. Introduction
verfasst von : Nombulelo Gumata, Eliphas Ndou
Erschienen in: Labour Market and Fiscal Policy Adjustments to Shocks
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Abstract
This book focuses on South African labour market dynamics, fiscal policy and their interaction with selected macroprudential tools and monetary policy. South Africa has long grappled with the problem of “jobless growth” alongside consumer and nominal wage inflation that are persistently at or above the upper end of the inflation target band. Recent developments include:
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Increased focus on income inequality and poverty: income inequality and poverty have worsened, such that government has intervened by introducing and phasing in a national minimum wage.
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Fiscal policy is constrained: since the global financial crisis and recession, fiscal policy has become constrained in the degree that it can be used to counter sluggish growth.
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Sovereign credit downgrades: A string of sovereign credit downgrades post-2009 have raised the cost of borrowing, negatively affected business confidence and thus further complicating the fiscal policy space.
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Call for reforms in product and labour markets: The confluence of the preceding events and other economic developments has resulted in recommendations to implement structural reforms in product and labour markets. Similarly, policy rates as monetary policy tools are known to be blunt instruments and have proven to be of limited potency or even entirely ineffective under certain economic conditions.
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Interactions between the role of macroprudential and labour market conditions and reforms: The role of macroprudential tools that can be used to complement monetary policy tools and labour market reforms has become a topical and pertinent research area for academics and policymakers alike.