This paper discusses the rationale and options for a fiscal anchor for South Africa and its potential for restoring and maintaining fiscal sustainability. It argues that a well designed fiscal anchor can be useful in the current fiscal milieu, but notes that the popularity of fiscal rules belies...

"This paper relaxes some key assumptions in the probabilistic approach to fiscal sustainability. First, the authors identify structural breaks over the sample period used to estimate the covariance matrix of the shocks to the debt ratios. Second, the assumption of normality of the shocks is...

How does the South African government react to changes in its debt position? In investigating the question, this paper estimates fiscal reaction functions using various methods (OLS, VAR, TAR, GMM, State-Space modelling and VECM). The paper finds that since 1946 the South African government has...