The business cycle resilience of the Western Cape economy: a regional analysis of the 2009 recession and subsequent recovery

Stellenbosch Working Paper Series No. WP17/2016
 
Publication date: 2016
 
Author(s):
[protected email address] (Bureau for Economic Research, University of Stellenbosch)
 
Abstract:

Business cycle research revived in the run-up to and in the aftermath of the Great Recession. This paper focuses on the concept of regional economic resilience as an applied field of business cycle research. The resilience of the Western Cape regional economy is analysed by assessing the impact of the 2009 recession. Being one of the leading provincial economies of South Africa, the question is asked to what extent the 2009 recession impacted the Western Cape’s longer term economic growth path. The latest research techniques in assessing economic resilience are applied, albeit that the analysis is narrowed down to quantifying the region’s resistance to and recoverability from the 2009 recession. While the national and provincial contexts receive attention, the focus is on the district economies of the Western Cape. The drivers of economic resilience are decomposed into two key forces, namely industry mix and regional competitiveness, using a shift-share analysis. Longer term structural change is also considered. The paper finds that the Eden and Overberg district economies’ growth paths, and the way in which these regions absorbed the recession impact, may provide policy makers with pointers as how to revive the Western Cape’s growth path, which took a knock with the 2009 recession.

 
JEL Classification:

E32, R12

Keywords:

Business cycles, Size and spatial distributions of regional economic activity

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Upcoming Seminars

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BER Weekly

13 September 2021
It was a data-heavy week in SA, with the 2021Q2 real GDP data indicating that the economy had better-than-expected recovery momentum in the first half of the year. While growth remained solid in the second quarter, both the survey and actual data released last week revealed the significant impact that the range of shocks at the start of the third quarter...

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