Original Research

Regional Impact of the Global Economic Crisis on the Free State Province in South Africa: A Computable General Equilibrium (CGE) Assessment

Helene Maisonnave, Jugal Mahabir, Margaret Chitiga, Ramos Mabugu
Journal of Economic and Financial Sciences | Vol 9, No 2 | a53 | DOI: https://doi.org/10.4102/jef.v9i2.53 | © 2017 Helene Maisonnave, Jugal Mahabir, Margaret Chitiga, Ramos Mabugu | This work is licensed under CC Attribution 4.0
Submitted: 18 December 2017 | Published: 11 August 2016

About the author(s)

Helene Maisonnave, Department of Economics, University of Le Havre, France
Jugal Mahabir, Department of Economics and Econometrics, University of Johannesburg,, South Africa
Margaret Chitiga, School of Public Administration and Management, University of Pretoria, South Africa
Ramos Mabugu, Stellenbosch University, South Africa

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Abstract

The decline in the world economy that followed the 2008-2009 global economic crisis had detrimental effects on most economies. Not enough attention has been paid to the process through which crisis-related pressures affected regional economies and sub-national governments. A regional computable general equilibrium model was developed to analyse impacts of the crisis on the regional economy of the Free State province in South Africa. Key results included a general fall in prices in the province, a fall in demand in sectors that are more vulnerable to global conditions, falling wages and declining incomes for agents and provincial government.

Keywords

Regional computable general equilibrium; South Africa; global economic crisis; economic impact; crisis response

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