This paper quantifies the effect of fiscal transfers on the trade-off between social relief and debt accumulation, and discusses the economic growth and fiscal implications of different combinations of expanded social support and funding choices. Given South Africa’s already high level of...

This white paper decomposes sovereign yields into expectations of future average short term rates and a term premium. We estimate that the term premium in South African sovereign bonds is lower than after the onset of the COVID pandemic, but still meaningfully higher than its historical average....

South Africa’s sovereign yield curve is one of the steepest in the world. We show that South Africa’s curve has steepened over recent years and that this can be explained by an increase in the term premium embedded in long rates. We also show that marketimplied long term neutral interest...

The Reserve Bank maintains a range of exchange rate indices which summarise developments in the New Zealand dollar, by aggregating various bilateral exchange rates that are relevant to New Zealand’s economy. In this article, we review some of the issues involved in doing this aggregation. From...

New Zealand's terms of trade have risen by 30 per cent in the last decade, raising national income by about 9 per cent. This note explores some of the economic consequences of the higher terms of trade.

The terms of trade are a key influence on New Zealand’s economy, and have often been quite volatile. This article compares New Zealand’s experience with those of a group of other advanced economies. Cycles in New Zealand’s terms of trade have been relatively large, but similar to those in...

The Balassa-Samuelson hypothesis suggests that countries with a weak relative productivity performance should, over time, see a low or falling real exchange rate. This note uses detailed sectoral data to test the hypothesis over the period 1978-2006 and also fails to find any evidence of the...