MACROECONOMIC POLICY
DUMA GQUBULE: A developmental central bank could help finance fiscal stimulus
SA’s elite — representing government, business, labour and community constituencies — came out in full force at the jobs summit in Midrand last week. They emerged with an 84-page document that served only to show they have run out of ideas on how to get the country out of its crisis of rising unemployment, poverty and inequality. Nowhere does the framework agreement explain how it will create 275,000 jobs a year. You can’t create jobs out of thin air. Sustainable job creation is the outcome of higher rates of economic growth. There is nothing in the agreement that will increase economic growth. The reason for the confusion is that unemployment is a macroeconomic phenomenon that cannot be solved with microeconomic reforms or job-creation projects, as an Institute for Economic Justice (IEJ) policy brief released last week said. However, macroeconomic policy has been a no-go area within Nedlac over the past two decades. This has undermined Nedlac and the concept of social-partner engag...
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