Decomposition of Interdependences in the South African Economy

Abstract

In this paper interdependencies in the South African economy, as reflected by the 1978 social accounting matrix, will be investigated. In doing so, two procedures are employed. The first procedure will decompose generalized multipliers into several effects. The second procedure considers the distribution of exogenous effects over the relevant economic agents identified in the social accounting matrix. The results of the first procedure indicate that the economic structure as described by the social accounting matrix contains limited inherent redistribution mechanisms from the white to the lower income black population group. The second procedure concludes that these two groups are essentially in competition with each other given an exogenous injection into the economic system