Can asymmetries account for the empirical failure of the Fisher effect in South Africa?

This paper investigates whether unobserved asymmetries can account for irregularities in the Fisher effect for the exclusive case of South Africa. This objective is attained by investigating unit roots within a threshold auto-regressive (TAR) models and estimating a threshold vector error correction (TVEC) models for the data. The empirical analysis depicts significant long-run Fisher effects whereas such effects are deficient with regards to the short-run. These results improve on those obtained in preceding studies for South Africa, in the sense of being closely emulated with the original hypothesis as presented by Fisher (1907).South Africa, Fisher effect, Inflation, Interest Rates, Threshold Co-integration

Changes in Inflation Persistence Prior and Subsequent to the Subprime Crisis: What are the Implications for South Africa?

The appropriateness of the inflation targeting regime as a policy framework for the South African Reserve Bank (SARB) continues to be a furiously debated topic for both academics and policymakers alike. In this study, we approach this debate by examining whether there have been any changes in the persistence of the inflation process for periods prior and subsequent to the global financial crisis. By effect, our study attempts to answer the question of whether inflation targets have been successful in controlling inflation rates in the face of unanticipated financial crisis. Indeed, our empirical results indicate that persistence in the inflation process has decreased in periods subsequent to the subprime crisis, and yet this has been accompanied by decreases in economic growth and unchanged high levels of unemployment. Our study ultimately suggests that given the current status of the economy, inflation may be required to be lowered to close-to-zero levels which will have to be accompanied with higher levels of economic growth, separate macroeconomic policies which specifically target unemployment and a change in domestic real interest rates

Investigating the Factors Influencing Consumers’ Adoption of Mobile Banking Services in Tshwane

  Abstract The primary aim of this research study was to examine factors influencing consumers’ adoption of mobile banking services in Tshwane, South Africa. Based on convenience and simple random sampling approaches, a structured questionnaire was used to collect primary data from the sample of one hundred and twenty (n = 120) participants who are retail banking customers. Frequencies, descriptive statistics, factor analysis and stepwise linear regression statistical techniques were applied to analyse the survey data using the SPSS 24 software. The overall Cronbach’s alpha (α = 0.762) and Keiser-Meyer Olkin (KMO = 0.811) values indicate that the instrument’s items were internally consistent and statistically valid for factor analysis. The adjusted R-squared estimated from stepwise linear regression model reveals that approximately 97% of variation in mobile banking services adoption by retail banking customers in Tshwane is influenced by perceived self-efficacy, perceived risk, relative advantage and perceived compatibility. Based on the t-statistics, perceived compatibility had the highest statistically significant and positive influence on mobile banking services adoption, followed by perceived self-efficacy and relative advantage. Conversely, perceived risk had a significant and negative influence on mobile banking adoption among retail banking consumers in Tshwane. Keywords: mobile banking, adoption, perceived, self-efficacy, risk, compatibility, relative advantage

Is there hysteresis in South African unemployment? Evidence from the post-recessionary period

High unemployment in South Africa possess as the country’s most problematic economic issue faced by South African policymakers and hence is considered an overriding priority within the design of large scale government expenditure programmes. In this study, we investigate the hysteresis hypothesis for 8 categories of unemployment in South Africa using a battery of individual and panel unit root testing procedures applied to quarterly data collected in the post-recession period of 2008:q1 to 2017:q2. Indeed our empirical results confirm the hysteresis hypothesis for a majority of unemployment classifications with the exception of unemployment associated with persons aged 55 to 64 years old. Overall, our obtained empirical results hold far reaching ramifications towards domestic policymakers

A partial general equilibrium analysis of fiscal policy injection on poverty and inequality in South Africa

This study employs a partial general equilibrium approach calibrated on the Social Accounting Matrix (SAM) and a contemporaneous dynamic computable general equilibrium (CGE) model to assess the effect of expansionary fiscal policy on economic growth, income inequality, poverty, employment and inequality reduction in South Africa. The simulation results reveal that expansionary fiscal policy i) benefits rich ‘white’ households the most and poor ‘coloured’ households the least ii) improves adult employment more than youth employment iii) improves employment in urban areas as proposed to employment in rural areas iv) has a very small effect on improving economic growth and reducing the Gini coefficient v) benefits ‘well-off’ households more than it does ‘poor’ households vi) promotes ‘low-skilled’ employment more than it does for ‘high-skilled’ labourers. Associated policy implications based on our findings are also discussed

Why latrines are not used : communities' perceptions and practices regarding latrines in a Taenia solium endemic rural area in Eastern Zambia

Taenia solium cysticercosis is a neglected parasitic zoonosis occurring in many developing countries. Socio-cultural determinants related to its control remain unclear. Studies in Africa have shown that the underuse of sanitary facilities and the widespread occurrence of free-roaming pigs are the major risk factors for porcine cysticercosis. The study objective was to assess the communities' perceptions, practices and knowledge regarding latrines in a T. solium endemic rural area in Eastern Zambia inhabited by the Nsenga ethno-linguistic group, and to identify possible barriers to their construction and use. A total of 21 focus group discussions on latrine use were organized separately with men, women and children, in seven villages of the Petauke district. The themes covered were related to perceived latrine availability (absence-presence, building obstacles) and perceived latrine use (defecation practices, latrine management, socio-cultural constraints). The findings reveal that latrines were not constructed in every household because of the convenient use of existing latrines in the neighborhood. Latrines were perceived to contribute to good hygiene mainly because they prevent pigs from eating human feces. Men expressed reluctance to abandon the open-air defecation practice mainly because of toilet-associated taboos with in-laws and grown-up children of the opposite gender. When reviewing conceptual frameworks of people's approach to sanitation, we found that seeking privacy and taboos hindering latrine use and construction were mainly explained in our study area by the fact that the Nsenga observe a traditionally matrilineal descent. These findings indicate that in this local context latrine promotion messages should not only focus on health benefits in general. Since only men were responsible for building latrines and mostly men preferred open defecation, sanitation programs should also be directed to men and address related sanitary taboos in order to be effective

Pursuing the Phillips curve in an African monarchy: The Swazi case

The purpose of this study is to examine whether we can identify a Philips curve fit for the Kingdom of Swaziland as a low middle income Sub-Saharan Africa monarchy using data collected between 1991 and 2016. In our approach we rely on the recently introduced nonlinear autoregressive distributive lag (N-ARDL) model to a variety of Phillips curve specifications. For robustness sake, we further employ three filters (one-sided HP, two-sided HP and Corbae-Oularis filters) to extract the gap variables necessary for empirical analysis. Our findings point to a linear, short-run traditional Philips curve whereas we find strong support for concave shaped unemployment-gap and output –gap based Phillips curve specifications. Given the specific form of concavity discovered in the Phillips curves, the low inflation rate experienced over the last couple of decades can be attributed to a worsening labour and goods markets. Moreover, our evidence also cautions Swazi policymakers of ‘overheating’ of the economy during economic booms in which stabilization tools are required to implemented in such instances. Given the overall absence of empirical studies establishing the Philips curve for the Swazi economy our study makes a valid contribution to the literature

Asymmetric pass-through effects from monetary policy to housing prices in South Africa

Following the recent financial crisis, spurred by the crash of house prices in the US, there has been a renewed interest by academics in examining the pass-through effects of monetary policy instrument to house price inflation. This study examines the asymmetric pass through effects from monetary policy to house price inflation for the case of South Africa. Our study uses a momentum threshold autoregressive model and a corresponding threshold error correction model (MTAR-TECM). The empirical results reveal a negative and significant pass through from interest rates to house price inflation, even though such pass-through effects are relatively weak. Overall, these findings undermine the ability of the South African Reserve Bank (SARB) to control real house price inflation

Pursuing the Phillips curve in an African monarchy: The Swazi case

The purpose of this study is to examine whether we can identify a Philips curve fit for the Kingdom of Swaziland as a low middle income Sub-Saharan Africa monarchy using data collected between 1991 and 2016. In our approach we rely on the recently introduced nonlinear autoregressive distributive lag (N-ARDL) model to a variety of Phillips curve specifications. For robustness sake, we further employ three filters (one-sided HP, two-sided HP and Corbae-Oularis filters) to extract the gap variables necessary for empirical analysis. Our findings point to a linear, short-run traditional Philips curve whereas we find strong support for concave shaped unemployment-gap and output –gap based Phillips curve specifications. Given the specific form of concavity discovered in the Phillips curves, the low inflation rate experienced over the last couple of decades can be attributed to a worsening labour and goods markets. Moreover, our evidence also cautions Swazi policymakers of ‘overheating’ of the economy during economic booms in which stabilization tools are required to implemented in such instances. Given the overall absence of empirical studies establishing the Philips curve for the Swazi economy our study makes a valid contribution to the literature

Nonlinearities in Wagner's law: Further evidence from South Africa

Recently, it has being speculated that the linear relationship between government expenditure and economic growth may be misspecified. In our study, we contribute to the literature by investigating a nonlinear expenditure-growth relationship for South Africa by applying threshold cointegration analysis to six variations of Wagner’s law. Indeed, our empirical analysis reveal a nonlinear relationship between the time series for four out of the six versions of Wagner’s law thus providing strong evidence of existing nonlinearities for the case of South Africa. We further find uni-directional causality running from government spending to output productivity with positive increases in government expenditure leading to improved GDP levels hence lending support to the Keynesian hypothesis. And yet, we also find that negative deviations from the steady-state are eradicated slower than positive ones hence implying that increases in government spending would be offset by negative shocks to the macroeconomy over the long-run. This implies that excessive spending by South African government is not a panacea in overcoming the adverse effects of the recent global recession on the macroeconomy