Understanding the behaviour of house prices and household income per capita in South Africa: Application of the asymmetric autoregressive distributed lag model

Homeownership by the lower and middle-income households is crucial to create wealth, particularly for South Africa with high levels of economic and wealth inequality. However, scholarship has paid little attention to how income affects the affordable housing market segment despite its systemic importance to the South African economy. This study employs the asymmetric autoregressive distributed […]

Does the Pursuit of Outreach Consistently Stifle the Financial Performance of Microfinance Institutions in sub-Saharan Africa?

We study the relationship between outreach and the financial performance of 479 microfinance institutions (MFIs) in 37 countries of sub-Saharan African (SSA), covering the period 1998 to 2012. This study builds on earlier literature on the relationship between outreach and the financial performance of MFIs across countries. Unlike many prior microfinance studies, we investigate the […]

Monetary policy in a model with commodity and financial market

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 […]

Effect of Financial Development on Economic Growth in sub-Saharan African: Does Sectoral Growth Matter?

The role of financial sector development in economic growth has received an extensive attention in the literature. Indeed, a well–developed domestic financial sector such as those of developed countries, can significantly contribute growth by increasing savings and investment, improves technological innovations and efficiently allocates resources. The development of the financial sector entails the institutionalization of […]

Spatial Externality, Openness and Financial Development in SADC: Beyond the Multilateral Monetary Agreement

Economic variables tend to exhibit variation not only over time, but also across space. Space influences the way an economic system works and is a source of economic advantages or disadvantages. Proximity brings agglomeration to industries and enhances knowledge spill-overs and transfers. In trade it promotes integration, enhances cross-border trade, reduces transport costs and reduces […]

Financial sector development, economic volatility and shocks in sub-Saharan Africa

The role of financial sector development in economic volatility has been extensively studied albeit without informative results largely on the failure of extant studies to decompose volatility into its various components. By disaggregating volatility, this study examines the effect of financial development on volatility as well as channels through which finance affects volatility components in […]

The Impact of Basic and Social Infrastructure Investment on Economic Growth and Social Development in South Africa’s Urban and Rural Municipalities

Basic and social infrastructure investment can assist in addressing widespread inequality and divided societies by promoting economic growth and social development. The aim of this study is to determine whether basic and social infrastructures investment differently affect economic growth and social development indicators of urban and rural municipalities. We used a balanced panel dataset containing […]

Spatial Externalities, Openness and Financial Development in SADC: Beyond the Multilateral Monetary Agreement

This study empirically evaluates spatial externalities in financial development in SADC in line with spatial proximity theory, which asserts that externalities increase with proximity. Precisely, the study tests if financially less developed economies in SADC benefit from linkages with and proximity to South Africa, a financially developed economy. The Spatial Durbin Model estimated using GMM […]

A New International Database on Financial Fragility

We present a new database on financial fragility for 124 countries over 1998 to 2012. In addition to commercial banks, our database incorporates investment banks and real estate and mortgage banks, which are thought to have played a central role in the recent financial crisis. Furthermore, it also includes cooperative banks, savings banks and Islamic banks, that are often thought […]

Financial sector development, inflation and openness: A comparative panel study of ECOWAS and SADC

This paper provides an empirical analysis of the comparative study between the Economic Community of West African States (ECOWAS) and Southern African Development Community (SADC) on the role of inflation in explaining the state of financial development of the two regions. In addition, the study seeks to find out if Rajan and Zingales Hypothesis which argues that simultaneous opening of […]

Financial Liberalisation and Economic Growth in the SADC

Attaining high levels of economic growth and development has been one the goals of the Southern African Development Community (SADC). This paper investigates the relationship between financial liberalisation and economic growth in SADC countries. Annual data for the 15 SADC countries for the period 1985-2011 was used to develop a fixed effect model, generalised method […]

Bank Deposit Contracts Versus Financial Market Participation in Emerging Economies

The financial sector of emerging economies in Africa is characterized by a non-competitive banking sector which dominates any direct participation of agents in asset markets. Based on a variant of Diamond and Dybvig’s (1983) model of financial inter-mediation, we formally explain both stylized facts through market inexperience”of agents in emerging economies. While experienced agents correctly […]

Chinese Foreign Direct Investment in Africa

The eyes of the world have, in recent years, been steadfastly focused on China’s economic progress. As China has in recent years emerged as a major player on the world economic stage, its growing relations with other developing regions received much attention. Of particular note is the way in which Sino-African relations have increased since […]

On the Looting of Nations

We develop a dynamic discrete choice model of an unchecked ruler making decisions regarding the development of a resource-rich country. Resources serve as collateral and facilitate the acquisition of loans. The ruler chooses either to stay in power while facing the risk of being ousted, or loot the country’s riches by liquefying the resources through […]