Macroeconomic Uncertainty in South Africa

This paper develops a new index of economic uncertainty for South Africa for the period 1990–2014. The index is constructed from three sources: (1) Disagreement among professional forecasters, (2) a count of international and local newspaper articles discussing economic uncertainty in South Africa a...

Full description

Saved in:
Bibliographic Details
Published in:The South African Journal of economics 2018-09, Vol.86 (3), p.361-380
Main Author: Redl, Chris
Format: Article
Language:English
Subjects:
Banking
business cycles
Consumer attitudes
Democratization
Depreciation
Economic analysis
Economic crisis
Economic indicators
Economic uncertainty
Employment
GDP
Gross Domestic Product
Industrial production
inflation
Investments
Local media
Macroeconomics
Money
Private sector
Recessions
South Africa
Trust
Uncertainty
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This paper develops a new index of economic uncertainty for South Africa for the period 1990–2014. The index is constructed from three sources: (1) Disagreement among professional forecasters, (2) a count of international and local newspaper articles discussing economic uncertainty in South Africa and (3) mentions of uncertainty in the quarterly economic review of the South African Reserve Bank. The index shows high levels of uncertainty around the period of democratic transition in 1992–1994, the large depreciation of the currency in 2001 and the financial crisis of 2008. The uncertainty index is a leading indicator of a recession. An unanticipated increase in the index is associated with a fall in GDP, investment, industrial production and private sector employment. Contrary to evidence for the U.S.A and the U.K., uncertainty shocks are inflationary. These results are robust to controlling for global uncertainty shocks, consumer confidence and financial shocks.
ISSN:0038-2280
1813-6982
DOI:10.1111/saje.12198