Corporate financialization in South Africa : From investment strike to housing bubble

This document is the Accepted Manuscript version. The final, definitive version of this paper has been published in Competition & Change, June 2018, published by SAGE Publishing.This article reveals the processes of financialization in the South African economy by tracing the sources and destinations of non-financial corporations’ liquidity. The paper argues that rather than the volume of non-financial corporations’ financial investment, the composition of financial assets is crucial to assess corporate financialization in the country. Non-financial businesses in South Africa fundamentally transformed their investment behaviour during the 1990s, shifting from more productive uses such as trade credit towards highly liquid and potentially innovative (and therefore risky) financial investment. Following the direction of financial flows the article shows that companies’ financial operations – fuelled by foreign capital inflows – are linked to the price inflation in South African property markets.Peer reviewe

PRE working paper series : numbers 667 to 722

This paper contains a numerical listing of working papers produced by the Policy, Planning, and External Affairs Complex. Each citation contains a brief abstract, and the contact point for the paper.Environmental Economics&Policies,Economic Theory&Research,Public Sector Economics&Finance,Economic Stabilization,Banks&Banking Reform

The Impact of Liberalized Financial System on Savings, Investment and Growth in Nigeria

For the past twenty years, an enhanced financial sectoral deregulation has been a major economic tool in the agenda of most less developed economies and Nigeria is no exception. The discouraging level of growth with reference to the savings and investment culture of the people and government involvement in these economies has call to question whether financial sector liberalization have an impact on savings and investment in the economy and by extension on the level of growth and development of such economies. This study attempted to take a cursory look at the issue by examining the impact of financial system liberalization on savings and investment and by extension growth and development in Nigeria between 1997 and 2008. Some of the policy recommendations centred on the government creating an enabling environment for private investment to thrive. This will go a long way in helping to promote private investment with significant benefits in the long run for growth and development to the advantage of the citizenry and the economy at larg

What does Germany expect to gain from hosting the 2006 Football World Cup – Macroeconomic and Regionaleconomic Effects

The paper will present some estimates of the potential macro- and regionaleconomic effects for the German economy from hosting the football world cup 2006. The results have been prepared in the years 2000 and 2001 using the sport-economic simulation model SPORT (Ahlert 2001). The model has a special focus on analyzing sport-economic activities and has been constructed within the framework of a research project financed by the Ministry of the Interior (Meyer & Ahlert, 2000). It is based on a sport-economic satellite account - a detailed sport-economic database in conformity with concepts and definitions of the S.A - which has been integrated into the German I.FORGE model. Its performance is founded on the I.FORUM philosophy (Almon 1991). The simulation results are based on a szenario which take into account the necessary investments for upgrading the stadium facilities in the venues of the event as well as the tourism expenditure of incoming world cup visitors during the event in 2006. The results will illustrate the importance of modelling sport-economic activities in deep sectoral and intertemporal detail. Besides the macroeconomic national effects, the paper explains, how these effects can be transmitted to the regional level of the German federal state level by the econometric model system LÄNDER. This model system is founded on the national accounts for Länder and specifies the economic development of every single of the 16 federal states in the context of the expected macroeconomic development calculated within the SPORT model on the national level (Meyer & Ahlert 2003). The results will show that it is possible to estimale the potential macroeconomic effects of the soccer World Cup 2006 on the national and regional level. Under favourable conditions - independent of the type of financing these necessary investments - the staging of the football World Cup positively influences income and employment.Germany, Football World Cup 2006, Macroeconomic and Regionaleconomic Effects

Growth strategies and poverty reduction: the institutional complementarity hypothesis

This article starts from the limits of the policies that assume a significant de-connection between antipoverty strategies and the logic of the growth regime and that mainly rely upon market mechanisms. By contrast, a branch of the new institutional economics argues that a complete set of coordinating mechanisms is constitutive of really existing economies and that they are more complementary than substitute. The Institutional Complementarity Hypothesis (ICH) may be useful for analyzing simultaneously the antipoverty policies and the viability of growth regimes. The different brands of capitalism are the outcome of complementary institutions concerning competition, labor market institutions, welfare and innovation systems. Generally, such configurations cannot be emulated by poor developing countries, but reviewing the preliminary findings of the UNRISD country case studies suggests some common features to all successful experiments. Basically, antipoverty policies are efficient when they create the equivalent of virtuous circles within which growth entitles antipoverty programs and conversely these programs sustain the speed and stability of growth. Two methods are proposed in order to detect possible complementarities and design accordingly economic policies: the Qualitative Comparative Analysis (QCA) on one side, national growth diagnosis on the other side. A special attention is devoted to the timing of policies and the role of policy regimes. A brief conclusion wraps up the major findings and proposes a research agenda.development theory ; antipoverty policy ; Washington consensus ; new institutional economics ; institutional complementarity hypothesis ; qualitative comparative analysis ; growth diagnosis

Market, Social Cohesion, and Democracy

This paper offers three guiding principles for a better relationship between the economy and democracy: democracy as the extension of citizenship; democracy as diversity; and democracy as complementary to clear, strong macroeconomic rules. This view, it is argued, implies that economic and social institutions must be subject to democratic political choice. In this context, it analyses the role of both national and international institutions in improving the complementarity of the market, social cohesion and democracy. The central role of economic and social rights serves as the overarching framework for the analysis.citizenship, democracy, social cohesion, market economy, inequality, property rights

THE TALE OF TWO TRAVERSES Innovation and Accumulation in the First Two Centuries of U.S. Economic Growth

Both the macroeconomic and the microeconomic evidence from U. S. economy’s experience over the past two centuries leads to a view of technological change (broadly conceived) as having not been “neutral” in its effects upon growth. The specific meaning of “non-neutrality” in this context is that technical and organizational innovation had effects upon the derived demands for factors of production, and these tended to alter the relative prices of the heterogeneous array of productive assets in the economy. By directly and indirectly impinging on relative real rates of remuneration established in the markets for particular types of human labor and skill, and for the services of specific tangible and intangible capital, “technological change” altered key conditions governing the absolute and relative growth rates of the various macroeconomic factors of production. On the other hand, because innovation exhibited strong cumulative features reflecting the influence of “localized learning,” past domestic factor market conditions exerted a persisting influence upon the globally non-neutral trajectory of American technological and organizational development. This essay thus explores two broad and related historical themes. Firstly, the non- neutrality of the impacts of innovations on the demand side of the markets for productive inputs implies that “innovation” should be understood as contributing to complex interactions among all the proximate “sources of growth.” Even though the latter are usually presented by exercises in “growth accounting” as distinct and separate dynamic elements contributing to the rise of labor productivity and per capita real output, the identification of the total factor productivity “residual” as the “contribution” of technological change is mistaken in ignoring the quantitatively important effect of successive capital- deepening “traverses” to the growth of labor productivity. The second theme underscores a fundamental contrast between the twentieth and the nineteenth century growth processes, in regard to the impacts of the predominant “bias” of the direction of innovation: the relative shift away from the accumulation of stocks of tangible reproducible capital and towards the formation of intangible productive assets by in investments in education, training and the search for new scientific and technological knowledge.

MODELLING THE IMPACTS OF MACROECONOMIC AND TRADE POLICIES ON THE SOUTH AFRICAN AGRICULTURAL SECTOR

The purpose of this paper is to investigate the importance of macroeconomic and trade policies on the agricultural sector in South Africa. Macroeconomic and trade policies are determined outside the agricultural sector and since the 1990s South Africa has been moving towards deregulation and trade liberalization. Structural econometric model was applied to determine the impacts of changes in macroeconomic and trade policies on the agricultural sector. Two Stage Least Squares (TSLS) was the technique used because of the simultaneous nature of the equations in the model. The results of the study shows that 10 percent reduction in import tariffs will lead to 11.44 percent increase in the degree of openness of the South African economy. Furthermore, the appreciation of the Rand will raise the domestic prices received by farmers.International Relations/Trade, Research Methods/ Statistical Methods,