Economic growth and unemployment under alternative monetary policy regimes: evidence from South Africa
- Authors: Kifa, Masini Guylain
- Date: 2014-06-10
- Subjects: Monetary policy - South Africa , Inflation (Finance) - South Africa , Economic development - South Africa , Unemployment - South Africa , Foreign exchange rates - South Africa , Interest rates - South Africa , Monetary policy - Developing countries
- Type: Thesis
- Identifier: uj:11451 , http://hdl.handle.net/10210/11147
- Description: M.Com. (Economic Development and Policy Issues) , Monetary policy is not only the process by which the monetary authority of a country controls the supply of money, but is furthermore a sufficient tool to overcome the problem of economic growth and unemployment. This can take place when the policy instruments – interest rates (Repo) and money supply growth (M3) – have significant effects on these macroeconomic variables. However, the issue of the efficacy of monetary policy on GDP growth and employment creation is at the centre of debates among researchers. Some researchers are of the opinion that the objective of monetary policy in achieving and maintaining price stability is founded on the idea that inflation is not good for economic growth, employment creation and income equality but, instead, only secures macroeconomic environment. In South Africa, the efficiency of different monetary policy tools, inflation and money-supply targeting, on economic performance has been questioned. Moreover, the issue of the high level of unemployment remains controversial among scholars. Therefore, the structural vector-error correction model (VECM) methods was used with quarterly data in order to investigate the impact of aggregate money supply (M3), interest rate (Repo) and real exchange rate on CPIX (inflation) , economic growth (GDP volume rate) and unemployment (joblessness rate) in South Africa for the period 1986 to 2010. The results show that both monetary-policy regimes have positively impacted on economic growth, but the impact of the pre-inflation-targeting regime is higher. Moreover, a weak positive liaison between monetary policy and unemployment is observed, but the post-inflation-targeting regime shows a higher percentage decrease in unemployment than the pre-inflation targeting period. Beyond any doubt, the research approves the engagement of the SARB to monitor (target) CPIX (inflation) due to its ability to ensure price stability and create a stable economic environment favourable to economic performance.
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- Authors: Kifa, Masini Guylain
- Date: 2014-06-10
- Subjects: Monetary policy - South Africa , Inflation (Finance) - South Africa , Economic development - South Africa , Unemployment - South Africa , Foreign exchange rates - South Africa , Interest rates - South Africa , Monetary policy - Developing countries
- Type: Thesis
- Identifier: uj:11451 , http://hdl.handle.net/10210/11147
- Description: M.Com. (Economic Development and Policy Issues) , Monetary policy is not only the process by which the monetary authority of a country controls the supply of money, but is furthermore a sufficient tool to overcome the problem of economic growth and unemployment. This can take place when the policy instruments – interest rates (Repo) and money supply growth (M3) – have significant effects on these macroeconomic variables. However, the issue of the efficacy of monetary policy on GDP growth and employment creation is at the centre of debates among researchers. Some researchers are of the opinion that the objective of monetary policy in achieving and maintaining price stability is founded on the idea that inflation is not good for economic growth, employment creation and income equality but, instead, only secures macroeconomic environment. In South Africa, the efficiency of different monetary policy tools, inflation and money-supply targeting, on economic performance has been questioned. Moreover, the issue of the high level of unemployment remains controversial among scholars. Therefore, the structural vector-error correction model (VECM) methods was used with quarterly data in order to investigate the impact of aggregate money supply (M3), interest rate (Repo) and real exchange rate on CPIX (inflation) , economic growth (GDP volume rate) and unemployment (joblessness rate) in South Africa for the period 1986 to 2010. The results show that both monetary-policy regimes have positively impacted on economic growth, but the impact of the pre-inflation-targeting regime is higher. Moreover, a weak positive liaison between monetary policy and unemployment is observed, but the post-inflation-targeting regime shows a higher percentage decrease in unemployment than the pre-inflation targeting period. Beyond any doubt, the research approves the engagement of the SARB to monitor (target) CPIX (inflation) due to its ability to ensure price stability and create a stable economic environment favourable to economic performance.
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Co-movement of the BRICS stock markets : a continuous wavelet transform analysis
- Authors: Batondo, Musumba
- Date: 2019
- Subjects: Stocks - Prices - BRIC countries - Mathematical models , Stock exchanges - BRIC countries
- Language: English
- Type: Masters (Thesis)
- Identifier: http://hdl.handle.net/10210/415044 , uj:35026
- Description: Abstract: During the past two decades, financial markets across the globe have experienced sporadic waves of crashes, raising concerns about the vulnerability of the global financial markets and the transmission mechanisms of shocks beyond borders. This minor-dissertation attempts to investigate the co-movement of stock markets in the BRICS nations (Brazil, Russia, India, China, and South Africa) and the United States (US) and their vulnerability to contagion effects during the recent major financial crises. The innovative approach used in the current work consists of performing wavelet transformation on return-series to determine the multi-horizon nature of co-movement, whether it is caused by pure contagion or interdependence and the dynamics of market integration. It further examines the lead-lag relationships among stock markets. It was found that before the 2006 US housing bubble, shocks were transmitted via pure contagion, thereby generating short-term shocks, in contrast to the 2007/2009 US subprime crisis and the 2010/2013 European Union sovereign debt crisis, which showed evidence supporting independence. Furthermore, when analysing the episodes of market integration, it was discovered that, in general, the presence of short- and long-term integration has deepened and strengthened correlations among equity markets. From a portfolio-diversification and risk-management perspective, these results indicate that the market in China provides fruitful ground for short-run investors from the other countries included in the current study. They also suggest that opportunities for benefits are lost for long-term investors owing to the interdependence that continually exists between states and which is enhanced by improvement in economic integration and trade linkages. , M.Com. (Financial Economics)
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- Authors: Batondo, Musumba
- Date: 2019
- Subjects: Stocks - Prices - BRIC countries - Mathematical models , Stock exchanges - BRIC countries
- Language: English
- Type: Masters (Thesis)
- Identifier: http://hdl.handle.net/10210/415044 , uj:35026
- Description: Abstract: During the past two decades, financial markets across the globe have experienced sporadic waves of crashes, raising concerns about the vulnerability of the global financial markets and the transmission mechanisms of shocks beyond borders. This minor-dissertation attempts to investigate the co-movement of stock markets in the BRICS nations (Brazil, Russia, India, China, and South Africa) and the United States (US) and their vulnerability to contagion effects during the recent major financial crises. The innovative approach used in the current work consists of performing wavelet transformation on return-series to determine the multi-horizon nature of co-movement, whether it is caused by pure contagion or interdependence and the dynamics of market integration. It further examines the lead-lag relationships among stock markets. It was found that before the 2006 US housing bubble, shocks were transmitted via pure contagion, thereby generating short-term shocks, in contrast to the 2007/2009 US subprime crisis and the 2010/2013 European Union sovereign debt crisis, which showed evidence supporting independence. Furthermore, when analysing the episodes of market integration, it was discovered that, in general, the presence of short- and long-term integration has deepened and strengthened correlations among equity markets. From a portfolio-diversification and risk-management perspective, these results indicate that the market in China provides fruitful ground for short-run investors from the other countries included in the current study. They also suggest that opportunities for benefits are lost for long-term investors owing to the interdependence that continually exists between states and which is enhanced by improvement in economic integration and trade linkages. , M.Com. (Financial Economics)
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Policy uncertainty, credit risk and unemployment in South Africa
- Authors: Leballo, Keorapetse
- Date: 2020
- Language: English
- Type: Masters (Thesis)
- Identifier: http://hdl.handle.net/10210/451460 , uj:39781
- Description: Abstract: A high and persistent level of unemployment along with the elevated costs of servicing debt are among the major challenges facing the South African government today. To this end, this study examines the role that sovereign credit risk and economic policy uncertainty respectively have on these two major challenges. We make use of a vector error correction and Markov-chain model to quantify these impacts under the guidance of pre-existing long-run cointegrating relationships, as well as the transitory assumption of interest rates across the evolution of the business cycle. Controlling for other salient macroeconomic features, our empirical findings point towards the existence of a symmetrical response of unemployment rates to changes in the credit risk level. Moreover, elevated forms of policy uncertainty are found to have adverse effects on debt servicing costs, where the impact is seen to be less pronounced during periods of slowing economic activity. The policy implication is that elevated levels of policy uncertainty reduce access to debt capital markets, as illustrated by increasing debt servicing costs, which consequently lessen government’s ability to raise funding and absorb an idling labour force. , M.Com. (Economics)
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- Authors: Leballo, Keorapetse
- Date: 2020
- Language: English
- Type: Masters (Thesis)
- Identifier: http://hdl.handle.net/10210/451460 , uj:39781
- Description: Abstract: A high and persistent level of unemployment along with the elevated costs of servicing debt are among the major challenges facing the South African government today. To this end, this study examines the role that sovereign credit risk and economic policy uncertainty respectively have on these two major challenges. We make use of a vector error correction and Markov-chain model to quantify these impacts under the guidance of pre-existing long-run cointegrating relationships, as well as the transitory assumption of interest rates across the evolution of the business cycle. Controlling for other salient macroeconomic features, our empirical findings point towards the existence of a symmetrical response of unemployment rates to changes in the credit risk level. Moreover, elevated forms of policy uncertainty are found to have adverse effects on debt servicing costs, where the impact is seen to be less pronounced during periods of slowing economic activity. The policy implication is that elevated levels of policy uncertainty reduce access to debt capital markets, as illustrated by increasing debt servicing costs, which consequently lessen government’s ability to raise funding and absorb an idling labour force. , M.Com. (Economics)
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