Latest News, Publications and Workshops

Latest Publications

The effectiveness of counter-cyclical loan-to-value regulations: generic versus sector-specific rules

This paper considers the implications of the counter-cyclical loan-to-value (CcLTV) regulation in a setting where different types of borrowers from distinct sectors of the credit market co-exist. To identify the optimal policy design, we consider two macro-prudential policy regimes, nanely generic and sector-specfic, and compare their effectiveness in enhancing financial and macroeconomic stability. The results show that both regimes are effective in this regard, especially when the economy is hit by financial and housing demand shocks.

Benefits of regulation vs. competition where inequality is high: The case of mobile telephony in South Africa

Ryan Hawthrone and Lukasz Grzybowski
South Africa is the most unequal country in the world, with a Gini coefficient of 0.63 in 2015 according to World Bank statistics. This is a consequence of apartheid-era racial discrimination policies (Leibbrandt et al., 2010). The top 10% of income-earners earn thirty times more than the bottom 10%.
 

Benefits of regulation vs competition where inequality is high: The case of mobile telephony in South Africa

We test for the distributional effects of regulation and entry in the mobile telecommunications sector in a highly unequal country, South Africa. Using six waves of a consumer survey of over 134,000 individuals between 2009-2014, we estimate a discrete-choice model allowing for individual-specific price-responsiveness and preferences for network operators. Next, we use a demand and supply equilibrium framework to simulate prices and the distribution of welfare without entry and mobile termination rate regulation.

Aggregate and sectoral public-private remuneration patterns in South Africa

Andreas Wörgötter and Sihle Nomdebevana
This paper investigates the aggregate and sectoral public-private remuneration pattern in South Africa since the introduction of an inflation-targeting framework in 2000.

The analysis is carried out with quarterly data for aggregate and 5 public and 6 private sector earnings per employee. Two research questions are addressed: First, is there a pattern of earnings development between the public and private sectors? This question is important, because the nature of the pattern can have different consequences for labour market performance. Second, is South Africa exposed to “Dutch disease”, which refers to the “infection” of earnings outside the resource extraction sectors by the externally determined ups and downs of resource extraction profitability.
 
The rich international literature on public-private remuneration patterns finds that in most cases public sector remuneration follows developments in the private sector, although exceptions are found for some East European economies during early phases of transition from central planning to a market economy. “Dutch disease” is found to be a regular feature of economies with a major resource extraction industry.
 
Econometric analysis confirms that there is a stable, long-run relationship between average remuneration in the public and private sector. The adjustment to the deviations from this long-run relationship is strong and significant for public-sector remuneration, while private-sector earnings neither respond to the deviations from the long-run relationship nor lagged changes of public sector remuneration. In other words, average remuneration in the public sector is following the private sector in the long run. In the short run individual public-sector remuneration is also found to follow individual private-sector remuneration, but not the other way around. For individual private sector remuneration some influence from public sector earnings cannot be rejected, but it is in general weak. The answer for the first question is a pattern where remuneration in the public sector wages follows the private sector on average.
 
Concerning the second question we find that remuneration in the mining sector does not influence remuneration in any other private sector, therefore a traditional “Dutch-disease” hypothesis for South Africa is rejected.
 
If this pattern remains stable, efforts to slow down the speed of the wage-price spiral should not exclude the private sector. Targeting public sector earnings alone will only have a weak influence on private sector earnings.

The role of the rand as a shock absorber

This paper investigates the impact of rand shocks on industry output and various other South African macroeconomic variables. We use a factor augmented model, which has the key advantage of providing a rich narrative about the disaggregated impacts of exchange rate shocks. We show that the currency tends to react to changes in the relative fundamentals of the economy, such as those captured by commodity export prices, and that the independent impact on the economy of exchange rate changes that are unrelated to fundamentals is estimated to be small.

Latest Workshops

CALL FOR PAPERS: Representivity, Diversity, and Gender in Economics in South Africa

Saturday, February 1, 2020 to Thursday, February 27, 2020

South Africa has had its fair share of issues with regards to the participation and contribution of various groups in society. These issues cut across various social cleavages such as race and gender. The study and practice of economics in South Africa has not been spared from these wider societal issues.

Annual Economic Research Southern Africa Workshop on ‘Structural Constraints on the Economy, Growth and Political Economy’

Friday, September 6, 2019

Keynote Speakers:

  • Axel Dreher from Heidelberg University
  • James Robinson from University of Chicago

The first annual Economic Research Southern Africa workshop on ‘Structural Constraints on the Economy, Growth and Political Economy’ brings together scholars and practitioners of growth and political economy of Africa. Sessions with keynote speakers and with contributed papers will reflect the current state of research in growth and political economy, and provide a forum for exchange for scholars and practitioners.

Call for Application: Skills Development Training in Econometrics

Monday, December 2, 2019 to Friday, December 6, 2019

ERSA is pleased to invite applications for the Skill Development Training Programme in basic Econometrics for academics and postgraduate students (masters and PhD) with limited training in Econometrics and quantitative methods. The skills development initiative is in line with ERSA's objective to deepen economic research capacity and to train young economists in Southern Africa.

Skills Development

Monday, July 3, 2017 to Friday, July 7, 2017

Call for Application for Skills Development Training in Econometrics

The ERSA is pleased to invite applications for the Skill Development Training Programme in basic Econometrics for academics and postgraduate students (masters and PhD) with limited training in Econometrics and quantitative methods. The skills development initiative is in line with ERSA’s objective to deepen economic research capacity and to train young economists in Southern Africa.