Positive Economic Growth Spillovers of G8 Countries into South Africa

Abstract

It is not clear to what extent the South African economic growth reacts to positive economic growth dynamics in the group of eight (G8) advanced economies. If so, which channels amplify the positive G8 GDP growth shocks. To give insights into this subject, this chapter investigates whether positive GDP growth shocks from G81 countries spill over into South African GDP growth. At the same time, some of the growth shocks from these countries are transmitted directly, whereas some are transmitted through other economies before affecting South Africa – via the so called third country effects channel. We broadly investigate three questions: What proportions of United Stated (US) growth shocks are transmitted via other countries within the G8 to impact South African growth?