This paper builds a small open economy model for a net commodity exporter to consider financial frictions and monetary policies in order to investigate the main determinants of business cycles. Since we make a distinction to the access of financial markets between the commodity and non-commodity sectors, we notice that as usual, a commodity price shock benefits the competitiveness of the economy and its borrowing terms.
This paper develops a new index of economic uncertainty for South Africa for the period 1990-2014 and analyses the macroeconomic impact of changes in this measure. The index is constructed from three sources: (1) Disagreement among professional forecasters about macroeconomic conditions using novel data from a forecasting competition run by a national newspaper, (2) a count of international and local newspaper articles discussing economic uncertainty in South Africa and (3) mentions of uncertainty in the quarterly economic review of the South African Reserve Bank.
This paper analyses trends in hours worked from South African household survey data for the period 1997 — 2011. The purpose of the paper is fourfold. First, the paper provides an overview on the trends in hours worked of formal sector employees, by various demographic and work characteristics. Second, the paper aims to establish how mean hours worked corresponded to the business cycle and third, the reliability of the Statistics South Africa hours worked data is assessed by comparing it with the data on hours working in the manufacturing sector by the Bureau of Economic Research (BER).
The international financial crisis that started in 2007 and the subsequent end of the long expansion in South Africa has refocused attention on the business cycle. Prior to the crisis, the economies of both developed and developing countries experienced an extended period of low and stable inflation and stable real economic growth, an episode that has been called the "great moderation".
Globalisation brought about worldwide changes, including economic and financial integration between countries. This integration implied, in business cycle theory, the emergence of a common business cycle. Most developed economies seem to follow the world business cycle most of the time. However, there is little evidence of the co-movement between emerging markets, such as South Africa, and the common cycle. Factor models, using principal component analysis, were constructed for developed and developing countries with output, consumption and investment data.