Showing items 1 - 8 of 8

Your selections:

A comparative analysis of the synchronisation of business cycles for developed and developing economies with the world business cycle

  • Authors: Botha, Ilse
  • Date: 2010
  • Subjects: Business cycles
  • Type: Article
  • Identifier: uj:5522 , http://hdl.handle.net/10210/13922
  • Description: Globalisation brought about worldwide changes, including economic and financial integration between countries. The objective of this paper is to establish if there is synchronisation between developed and developing countries with the world cycle. Research results show that business cycles have become less volatile after globalisation, but there is not much consensus on whether business cycles have become less or more synchronised since globalisation. Little research has been done on co-movement between emerging markets, such as South Africa, and the world business cycle. This paper derives common factors for developed and developing countries by applying principal component analysis (PCA) to output, consumption and investment data, which represents the countries’ business cycles. The empirical analysis shows co-movement between some countries and the world business cycle (G7 countries as proxy). The results suggest that there are idiosyncratic and globally common shocks, which play different roles over time in different countries. The paper goes on to suggest that there are clear differences in how developed and emerging markets co-move with the world business cycle. A key finding is that the co-movement between developing economies and the world business cycle has increased since globalisation. This research also confirms previous research that most economies follow the world business cycle when large shocks – such as the recent economic downturn – occur. This has implications for forecasting the business cycle, especially in times of economic turmoil.
  • Full Text:

Characterising cycles exhibited by important financial sections in the South African economy

Happy in the informal economy? A case study of well-being among day labourers in South Africa

  • Authors: Blaauw, Phillip , Botha, Ilse , Schenck, Rinie , Schoeman, Christie
  • Date: 2013
  • Subjects: Day labouring , Well-being , Happiness , Informal economy
  • Type: Article
  • Identifier: uj:5532 , ISSN 1535-0754 , http://hdl.handle.net/10210/13943
  • Description: Past research provided evidence of the negative effect that individual unemployment can have on subjective well-being. The persistent high levels of unemployment and poverty in South Africa have been well documented. Many people are forced into the informal economy, where they engage in a variety of survivalist activities such as day labouring. As o previous study has been conducted on the well-being of day labourers, the aim of this paper is to investigate the determinants of the well-being of South African day labourers. Objective and subjective functions are compared to determine the role of income and other variables in the well-being of day labourers. The determinants are categorised according to economic, comparison and attitudinal variables. The objective function uses income and the subjective function uses the binary measure of experiencing a good week in terms of wages as dependent variables. The results showed that attitudinal variables are important determinants for the subjective measure of well-being. The economic variables were important in both functions. The findings of this paper confirm other research findings showing that personal income is important for well-being in a poor community. The difference between these functions indicates that the subjective and objective measures of well-being both capture valuable characteristics of subjective well-being (SWB) in a poor community.
  • Full Text:

Leads and lags in African sovereign credit ratings

  • Authors: Pretorius, Marinda , Botha, Ilse
  • Date: 2021
  • Subjects: Africa , Sovereign credit ratings , Leaders
  • Language: English
  • Type: Article
  • Identifier: http://hdl.handle.net/10210/481518 , uj:43633 , Citation: Pretorius, M. & Botha, I. (2021) Leads and Lags in African Sovereign Credit Ratings, Journal of African Business, 22:2, 235-253, DOI: 10.1080/15228916.2020.1745009
  • Description: Abstract: The majority of sovereign nations have a formal credit rating from more than one credit rating agency in order to bridge the potential informational gap that goes with only one formal rating. This study investigates the behaviour of rating agencies to determine if the African sovereign ratings by the three major credit rating agencies are different and if their rating actions have any influence on each other. The lead-lag relationships between the agencies are investigated by making use of a method similar to the Granger causality test in an ordered probit pooled-data and individual country time-series setting. The monthly rating changes for the three agencies were used for 12 African countries from 2009 to 2018. The results show that when general rating changes are taken into account, Moody’s follows Fitch in more instances than Fitch follows Moody’s. Furthermore, when upgrade and downgrade actions are taken into account, Standard and Poor’s leads Fitch during all downgrade periods and in some periods after a rating upgrade. It is also shown that Fitch leads Moody’s during all downgrade periods and in some periods after a rating upgrade. In terms of individual country results, for 7 of the 12 countries there is no evidence of herding or habit behaviour between any of the rating pairs. Herding behaviour was identified between different pairs of rating agencies for Angola, Egypt, Mozambique, South Africa and Tunisia. Fitch exhibits habit behaviour for Mozambique, whereas Standard and Poor’s shows contrarian habit behaviour for that country.
  • Full Text:

Measuring the effect of the National Credit Act on indebtedness in South Africa

  • Authors: Botha, Ilse , De Wet, Shaun , Booyens, Marno
  • Date: 2015-04
  • Subjects: Consumer credit , Credit regulation , Debt , Over-indebtedness , South Africa. National Credit Act, 2005
  • Type: Article
  • Identifier: uj:5523 , ISSN 19957076 , http://hdl.handle.net/10210/13927
  • Description: South Africa continues to exhibit high levels of debt-to-disposable income along with a high number of impaired credit records. The National Credit Act No. 34 of 2005 (NCA) was established in order to address these high levels. This study expands the limited research by investigating the NCA’s ability to reduce levels of over-indebtedness. The study employed quarterly data (2001-2013) in an OLS regression model in order to establish the determinants of over-indebtedness and assess the impact of the NCA. It was found that the macro-economic variables GDP, prime rate, property prices, consumer consumption expenditure, debt-to-disposable income and the level of unemployment were major contributors to the level of over-indebtedness. The NCA proved to have a positive significant effect on the levels of over-indebtedness, indicating that the NCA had not succeeded in its purpose of reducing the vulnerability of consumers to becoming over-indebted. The results suggest that the affordability assessment of the NCA must be improved in order to conduct a form of credit stress testing on consumers during their application for credit.
  • Full Text:

Modelling the business cycle of South Africa: linear vs non-linear methods.

  • Authors: Botha, Ilse
  • Date: 2008-06-11T06:31:46Z
  • Subjects: South Africa , business cycles
  • Type: Thesis
  • Identifier: uj:2612 , http://hdl.handle.net/10210/605
  • Description: The purpose of this study is twofold. Firstly, business cycle theories have been developed as early as 1911 (Shumpeter). These theories are well researched and well documented, and all of these theories concentrate on the real sector. South Africa is an emerging market and since 1994 the country has liberalized its market, a process that holds advantages and disadvantages. This emerging market status as well as the relative size of imports and exports to GDP in South Africa, makes the country very vulnerable to changes in the world economy. Examples of this are the contagion from Asia in 1997, the Russian crisis in 1998, and the impact of September 11 in the US on the South African economy. Business cycles also have changed over the years; they are less volatile and more synchronized over the world and the financial markets play a more important role. This is another reason why it might be useful to identify a financial cycle and investigate its relationship with the real cycle. The SARB (South African Reserve Bank) has some financial indicators in its leading indicator but the latter is mainly driven by real indicators. The financial cycle identified uses the equity market, the capital market and the domestic financial market as components. All of the determinants of these three components are available at a higher frequency than the GDP growth (our proxy for the business cycle); therefore the financial cycle can be used as a leading indicator incorporating international and domestic financial events. Secondly, an ongoing debate in business cycle research is the question of a stable economy (business cycle) influenced by exogenous shocks or an unstable economy with an endogenous business cycle (Classical vs. Keynesian view). This issue will be addressed by modelling the business cycle with a linear as well as a non-linear model. Linear models are usually used to demonstrate exogenous shocks on the business cycle, whereas nonlinear models have more of an endogenous assumption regarding the business cycle. Non-linear models learn over time and adjust to the new level of peaks and troughs and can therefore predict turning points more accurately. This suggests that business cycles have changed since 1960: they became less volatile, more synchronized across the world and the amplitude of peaks and troughs is lower. Because of these characteristics it would be useful to fit a non-linear model to the business cycle. However, exogenous shocks cannot be totally ignored – especially in an emerging market such as South Africa. The STAR (smooth transition autoregressive) model makes room for a linear and a non-linear component, and can over time determine if there is only a linear or non-linear component or sometimes both. The results of this study support the structural or institutional view. They believe economic fluctuations are caused by various structural or institutional changes. Adherents to this view do not believe that the market system is inherently stable or systematically unstable (Classical vs. Keynesian view). They focus on structural changes and unpredictable events. They do not have set ideas on economic policy. According to them the appropriate policy will vary from time to time as circumstances change. , Prof. L. Greyling
  • Full Text:

South African bonds as an alternative diversification asset for developed bond markets

The subjective well-being of day labourers in South Africa : the role of income and geographical location

  • Authors: Blaauw, Phillip F. , Botha, Ilse , Schenck, Catherina
  • Date: 2018
  • Language: English
  • Type: Article
  • Identifier: http://hdl.handle.net/10210/273320 , uj:29115 , Citation: Blaauw, P.F., Botha, I. & Schenck, C., 2018, ‘The subjective well-being of day labourers in South Africa: The role of income and geographical location’, South African Journal of Economic and Management Sciences 21(1), a2087. https://doi.org/10.4102/ sajems.v21i1.2087 , ISSN: (Online) 2222-3436
  • Description: Abstract: Background: The informal economy in South Africa provides employment to large numbers of people who would otherwise have no opportunity to earn a living. Yet informal activities, such as day labouring, generate highly uncertain returns. Although it seems reasonable to conclude that day labourers would be dissatisfied with their lives, this is not necessarily the case as several factors contribute to people’s subjective well-being. Aim: This study is in response to a call for more research on the subjective well-being of marginalised groups in South Africa’s informal labour market. Setting: The day labour market in South Africa, whose members congregate at hiring sites hoping to be picked up by passers-by in need of temporary, casual workers. Methods: Using Sen’s Capability Approach, the study builds on earlier research conducted on the general well-being of day labourers in South Africa, with specific focus on their subjective well-being and geographical location. The results from a countrywide survey of 3830 day labourers were used in a regression analysis to compare the subjective well-being among day labourers across the nine provinces of South Africa. Results: There are statistically significant differences in the well-being of day labourers across the nine provinces. Economic variables play a role in both objective and subjective measures of well-being, while attitudinal and comparison variables are significant for the objective and subjective measures, respectively. Conclusions: Although they have to operate in harsh conditions, day labourers in South Africa display agency by choosing to migrate to richer provinces in search of greater economic opportunity and reward. However, these potential gains are often negated by increased levels of competition and thus depressed wage levels. How to nurture marginalised groups’ abilities to exercise agency and take more control of their lives represents fertile ground for researchers in future.
  • Full Text:
  • 1
  • Disclaimer
  • Privacy
  • Copyright
  • Contact