On a provisional computable general equilibrium model for South Africa

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Periodical article

Title:	On a provisional computable general equilibrium model for South Africa
Authors:	Naudé, W.A. Brixen, P.
Year:	1993
Periodical:	South African Journal of Economics
Volume:	61
Issue:	3
Pages:	153-165
Language:	English
Geographic term:	South Africa
Subjects:	econometrics economic policy
External link:	https://doi.org/10.1111/j.1813-6982.1993.tb01217.x
Abstract:	Computable general equilibrium (CGE) models have become standard tools to support economic policy analyses in developed and developing countries. This paper applies the CGE model for South Africa by basing it on the 1988 social accounting matrix (SAM) of J.B. Ecker et al. (1992). It starts by reviewing the causes of the structural distortions in the South African economy which inhibit growth and redistribution and which call for adjustment. To obtain an indication of how economic restructuring in South Africa should proceed, a multisector CGE model is used to simulate the effects of economic policies, external shocks and structural adjustments. Four experiments are carried out, namely an increase in government consumption, a decrease in import tariffs, an increase in world prices and an increase in export demand. The experiments lead to the conclusion that any restructuring of the South African economy should incorporate three aspects: export growth; the substitution of imported capital and intermediate goods by providing economies of scale necessary for low-cost production; the redistribution of income and wealth. Bibliogr., notes, ref.