Decomposing the impact of human capital on household income inequality in South Africa: Is education a useful measure?
- Authors: Friderichs, Tamaryn J , Keeton, Gavin R , Rogan, Michael
- Date: 2023
- Subjects: To be catalogued
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/470842 , vital:77400 , https://doi.org/10.1080/0376835X.2022.2163228
- Description: Human capital (HC) has increasingly been identified as a driver of economic development, with the potential to reduce income inequality, which, in South Africa, originates in the labour market. HC is, however, a complex concept to measure. This study uses Fields’ regression-based decomposition method to analyse the relationships between income inequality and HC in South Africa. The Fields method allows for the analysis of the impact of several factors contributing to HC on the distribution of a measure of income. Data from the National Income Dynamics Study (NIDS) wave 1 (2008) and 5 (2017) are used. The findings suggest that increasing educational attainment, through improved school quality for all, would likely play a key role in reducing income inequality in South Africa. Furthermore, the large role of education attainment in explaining household income inequality supports the use of education attainment as a proxy for HC in South Africa.
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- Date Issued: 2023
Measuring human capital in South Africa using a socioeconomic status human capital index approach
- Authors: Friderichs, Tamaryn J , Keeton, Gavin R , Rogan, Michael
- Date: 2022
- Subjects: To be catalogued
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/477962 , vital:78141 , https://doi.org/10.1080/0376835X.2021.1941779
- Description: The Human Capital Index (HCI) developed by the [World Bank, 2018a. The human capital project. World Bank. https://hdl.handle.net/10986/30498 Accessed 26 February 2019] provides a measure which can be used to study human capital (HC) productivity gaps between countries. The HCI uses measures of survival, education and health to estimate, at a country level, the HC ‘a child born today can expect to attain by her/his 18th birthday, given the risks of poor health and poor education where she lives’ [World Bank, 2018a. The human capital project. World Bank. https://hdl.handle.net/10986/30498 Accessed 26 February 2019, 2]. The socioeconomic disaggregated human capital index (SES-HCI), an extension of the HCI, provides a means for analysing HC inequalities within countries. This study estimates SES-HCIs for South Africa by income quintiles, school quintiles, geographical area, gender and race. The main driver of HC inequalities in all the SES indicators is found to be the quality of schooling. Factors to address the inequalities and the limitations of the measuring instruments are identified.
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- Date Issued: 2022
An analysis of the impact of the financialization of commodity markets
- Authors: Ndawona, T , Keeton, Gavin R , Cattaneo, Nicolette S , Mann, L
- Date: 2019
- Subjects: To be catalogued
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/477865 , vital:78131 , https://hdl.handle.net/10520/EJC-16652e0142
- Description: There is growing evidence that the dramatic increase in real commodity prices from 2002-2011 cannot be attributed solely to fundamental (demand and supply) factors. Over this period, there was major growth in the trading activities of financial investors in commodity derivative markets. This process, termed “financialization”, had important effects on price dynamics. This paper calculates rolling correlations for futures and spot returns for different commodities both for the period 2002-2011 when commodity prices were rising, and also from 2011-2015, when prices were falling. The paper finds a rise in correlations of index-based commodities during the period of rising prices, when commodity assets under management grew rapidly, and a fall during the period of declining prices, when commodity assets under management halved, supporting the view that financialization played a role in driving prices. This conclusion is reinforced by the finding that the same increase and decrease in correlations did not occur for bulk commodities. Granger causality tests reveal evidence of futures prices driving spot prices during the financialization period when prices were rising. However, there is a shift to more bi-directional relationships when prices (and correlations) fell. These findings support the role of financialization during the period of rising prices, as investor exposure to index-based commodities was usually achieved through the futures market.
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- Date Issued: 2019
"Post-Truth,”“Alternative Facts” and “Fakenomics"
- Authors: Keeton, Gavin R
- Date: 2018
- Subjects: To be catalogued
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/477887 , vital:78133 , https://doi.org/10.1111/saje.12181
- Description: South African companies are accused of hoarding profits to accumulate large amounts of “idle” cash, as well as of being the perpetrators of massive illegal capital flight. This paper argues that much of the claimed corporate cash is either offshore or belongs to banks. It reminds that bank deposits increase when companies borrow, not when they retain profits. It shows, too, that measures of massive capital flight actually reflect data errors. Exaggerating, through faulty methodology the extent to which companies have cash or may be involved in illegal capital flight is unhelpful. It exacerbates already‐fraught government‐business relations, and complicates the search for solutions to South Africa's economic problems.
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- Date Issued: 2018
Obtaining Clear and Timely Business Cycle Turning Point Signals With a Composite Leading Business Cycle Indicator
- Authors: Keeton, Gavin R
- Date: 2017
- Subjects: To be catalogued
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/477876 , vital:78132 , https://doi.org/10.1080/10800379.2017.12097319
- Description: The two decades preceding the 2008 global financial crisis was a period of unprecedented macroeconomic stability, in which sustained, strong economic growth was accompanied by low inflation. Termed the “Great Moderation” (CitationBernanke, 2004) reduced mac-roeconomic volatility over the period was variably at-tributed to structural economic changes, improve-ments in monetary policy and “luck” (CitationBernanke, 2004). Structural changes contrib-uting to reduced volatility included globalisation, the increased depth and sophistication of financial mar-kets, the increased importance of services in global economic activity and better management of invento-ries as a result of computer technolo-gy. CitationBernanke (2004:1) notes also that “Few disagree that monetary policy has played a large part in stabilizing inflation, and so the fact that output vol-atility has declined in parallel with inflation volatility, both in the United States and abroad, suggests that monetary policy may have helped moderate the vari-ability of output as well.” The third contribution to re-duced volatility, “luck”, reflects the fact that the world economy was subjected to fewer, less serious external shocks than previously.
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- Date Issued: 2017
A Note on the (Continued) Ability of the Yield Curve to Forecast Economic Downturns in South Africa
- Authors: Botha, Ferdi , Keeton, Gavin R
- Date: 2014
- Subjects: To be catalogued
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/395994 , vital:69142 , xlink:href="https://doi.org/10.1111/saje.12053"
- Description: In 2002-2003, the South African yield spread falsely signalled a downswing that never materialised. This paper provides two reasons for this false signal. First, while the Reserve Bank never actually officially declared the start of a downswing, by alternative measures a downswing did actually occur. It is this severe weakness in economic activity at that time that the yield curve pointed to. Second, short-term interest rates in 2003 were higher than they should have been because of a mistake made in measuring consumer price inflation. Because South Africa had recently introduced an inflation-targeting regime, policy interest rates were, as a result of this error, kept too high for too long. This policy mistake was rectified as soon as the error in the Consumer Price Index was discovered. Thus, the yield curve in 2003 pointed to the reality that short-term interest rates were too high and risked pushing the economy into full blown recession. This is demonstrated by the fact that it was a fall in long bond interest rates that caused the yield spread to turn negative, indicating expectations that short-term interest rates would need to be cut – as indeed they were.
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- Date Issued: 2014
The determinants of household savings in South Africa
- Authors: Simleit, C , Keeton, Gavin R , Botha, Ferdi
- Date: 2011
- Subjects: To be catalogued
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/396153 , vital:69154 , xlink:href="https://hdl.handle.net/10520/EJC21526"
- Description: In South Africa, substantial government dissaving as well as poor household savings performance has caused a decline in aggregate savings. Whilst government dissaving has been successfully reversed, household savings continue to fall. Low domestic savings have required South Africa to attract large, volatile portfolio capital inflows to fund a structural current account deficit. Repeated reversals of such inflows have constrained domestic growth and hence an understanding of the factors that have caused this decline in savings is essential in order to formulate policies supportive of sustained higher rates of economic growth. Within the context of the existing literature, this article examines the various determinants of household savings using a vector error-correction model (VECM). The results suggest that interest rates, a wealth effect and upturns in the business cycle all contribute to explaining the decline in household savings. The presence of a partial offset between household savings and government savings also has important implications for the effectiveness of using the fiscal position of the South African government to boost savings.
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- Date Issued: 2011
The South African yield curve as a predictor of economic downturns: an update
- Authors: Clay, R , Keeton, Gavin R
- Date: 2011
- Subjects: To be catalogued
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/477898 , vital:78134 , https://www.ajol.info/index.php/aref/article/view/86954
- Description: This study re-examines the yield curve’s forecasting abilities in South Africa and investigates its ability to predict the most recent economic downturn of 2007/09. The study builds on the earlier work of Nel (1996) and Aziakpono and Khomo (2007) who found that the yield curve does accurately forecast downswings in the South African economy. It confirms Aziakpono and Khomo’s finding that the yield curve falsely predicted a downswing in 2002/03, but provides evidence that the yield curve has not lost its predictive powers in the most recent downturn of 2007/09. The simple and modified probit models are used to examine the yield curve’s ability to forecast economic downturns. This is compared to the forecasting abilities of the JSE All Share Index, the SA Reserve Bank’s leading economic indicator and M3 money supply. The yield spread was better able to predict all the downturns since 1980 than any of the other variables. The best forecast is found to be 2 quarters ahead. This indicates that the yield spread is still a powerful forecasting tool for predicting economic downturns in South Africa.
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- Date Issued: 2011
Between a rock and a hard place:
- Authors: Keeton, Gavin R
- Date: 2009
- Language: English
- Type: text , article
- Identifier: http://hdl.handle.net/10962/159401 , vital:40294 , https://hdl.handle.net/10520/EJC139947
- Description: Gavin Keeton takes an economist's tour of the current crisis : how did it happen and what does it mean?
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- Date Issued: 2009