scholarly journals Resolving the energy-growth nexus in South Africa

2018 ◽  
Vol 11 (1) ◽  
Author(s):  
Sehludi B. Molele ◽  
Thobeka Ncanywa
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Energy Use ◽  
Negative Relationship ◽  
Economic Life ◽  
Oil Consumption ◽  
Oil Supply ◽  
Supply Shocks ◽  
The Government ◽  
Oil Supply Shocks

Energy use is a pivotal element in the economic life of any country, especially in a developing economy such as South Africa. Based on trends such as load-shedding and oil supply shocks, it is essential to investigate the relationship between electricity and oil consumption to economic growth. This is particularly relevant in the South African context, where policy-makers have had to grapple with excess demand for electricity. The Johansen cointegration and vector error correction model approaches have been used to examine a short- and long-run relationship between energy consumption and economic growth. It has been found that electricity consumption has a negative relationship with economic growth and oil consumption has a positive relationship. Therefore, conservation policies like electricity rationing may be implemented, thereby proving to be beneficial to the broader economy. To offset periodical effects such as oil supply shocks, the country should keep high or adequate amounts of oil reserves and/or invest in oil exploration. It is highly recommended, regarding electricity, that the government is to adopt policy measures and direct interventions to promote an efficient use of electricity.

scholarly journals Oil supply shocks and economic growth in the Mediterranean

Energy Policy ◽  
2017 ◽  
Vol 110 ◽  
pp. 167-175 ◽  
Author(s):  
Andrea Bastianin ◽  
Marzio Galeotti ◽  
Matteo Manera
Keyword(s):  
Economic Growth ◽  
Oil Supply ◽  
Supply Shocks ◽  
The Mediterranean ◽  
Oil Supply Shocks

scholarly journals Relative Impact of Domestic and Foreign Public Debt on Economic Growth in South Africa

2020 ◽  
pp. 193672442098041
Author(s):  
Talknice Saungweme ◽  
Nicholas M. Odhiambo
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Public Debt ◽  
Foreign Debt ◽  
Negative Relationship ◽  
Relative Impact ◽  
Long Run ◽  
Short Run ◽  
The Government ◽  
The Impact

This paper investigates the debt-growth nexus by testing both the impact of aggregate public debt on economic growth and the relative impact of domestic and foreign public debt on economic growth using South Africa as the case study—from 1970 to 2017. Based on the autoregressive distributed lag (ARDL) technique, the findings reveal that the impact of aggregated public debt on economic growth in South Africa is statistically significant and negative, both in the short run and in the long run. The results further reveal that domestic public debt and economic growth have a statistically significant and positive relationship in the short run only. Furthermore, foreign public debt has a statistically significant and negative relationship with economic growth but only in the long run. Therefore, the study recommends the government to manage effectively its debt and to finance long-term high-returning productive investments that should translate into economic growth. Finally, the study cautions the country against growing public debt, predominantly foreign debt, to finance its increasing recurrent expenditure needs.

scholarly journals The impact of a fuel levy on economic growth in South Africa

2018 ◽  
Vol 29 (1) ◽  
pp. 41-49 ◽  
Author(s):  
Thobeka Ncanywa ◽  
Nosipho Mgwangqa
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Government Expenditure ◽  
Negative Relationship ◽  
Petroleum Products ◽  
Tax System ◽  
Vector Autoregressive ◽  
Long Run ◽  
The Government ◽  
The Impact

Government expenditure is one of the factors that could influence economic growth and it depends on borrowing or on the amount of tax revenue. A fuel levy, as an excise tax charged on petroleum products such as petrol, diesel and biodiesel, can be an important source of revenue for the government. It can, however, be a burden on fuel consumers. The present study, as an effort to address this controversy, used the vector autoregressive approach to examine the impact of fuel levies on economic growth in South Africa. The results showed a long-run unidirectional negative relationship between economic growth and fuel levy. The conclusion was that the economy needs to grow at a higher rate so as to boost tax revenues and public expenditure. Strong revenue collection, therefore, depends on highly increasing economic growth and efficient tax administration. The implication of a growth-oriented tax system is to minimise distortions created by the tax system and create incentives for drivers of economic growth.

The Myth of Middle Class Moderation: African Lessons for South Africa

1988 ◽  
Vol 16 (2) ◽  
pp. 45-48
Author(s):  
Pauline H. Baker
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Middle Class ◽  
Empirical Research ◽  
Political Behavior ◽  
Economic Performance ◽  
Political Stability ◽  
Underlying Assumption ◽  
Coup D'etat ◽  
The Government

An underlying assumption that ocurs in both conventional wisdom and in many academic analyses of political behavior is the notion that a critical linkage exists between political change and economic performance. The assumption is that economic growth is either a precondition or a correlate of democracy and political stability. Little empirical research has been done to test the validity of this widely held assumption as it applies to multicultural societies. Moreover, in the African environment, the assumption seems to operate only in selected cases or in ways that defy categorization. Jerry Rawlings, for example, said he led his first coup d’etat in Ghana because the government was going to devalue the currency; he led his second coup, in part, because the next government was going to devalue; and, during his own tenure in office, he has presided over a 1000 percent devaluation.

scholarly journals The Contribution of Foreign Direct Investment (FDI) To Domestic Employment Levels in South Africa: A Vector Autoregressive Approach

2019 ◽  
Vol 11 (1(J)) ◽  
pp. 110-121
Author(s):  
Bongumusa Prince Makhoba, ◽  
Irrshad Kaseeram
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Least Squares ◽  
South African ◽  
Empirical Analysis ◽  
Negative Relationship ◽  
Ordinary Least Squares ◽  
Series Data ◽  
The South ◽  
Vector Autoregressive

Several empirical works have yielded mixed and controversial results with regard to the effects of FDI on employment and economic growth. The primary focus of this study is to investigate the contribution of FDI to domestic employment levels in the context of the South African economy. The analyses of the study were carried out using the annual time series data from 1980 to 2015. The macroeconomic variables employed in the empirical investigation include employment, FDI, GDP, inflation, trade openness and unit labour costs. The study used secondary data from the South African Reserve Bank and Statistics South Africa database. The study estimated a Vector Autoregressive/ Vector Error Correction Mechanism (VAR/VECM) approach to conduct empirical analysis. However, the study also employed single equation estimation techniques, including the Ordinary Least Squares (OLS), Fully Modified Ordinary Least Squares (FMOLS), Dynamic Ordinary Least Squares (DOLS) and Canonical Cointegrating Regression (CCR) models as supporting tools to verify the VAR/VECM results. This study provides strong evidence of a significant negative relationship between FDI and employment levels in the South African economy. Empirical analysis of the study suggests that the effect of economic growth on employment is highly positive and significant in South Africa’s economy. The study recommends that policymakers ought to invest more in productive sectors that aim to promote economic growth and development to boost employment opportunities in South Africa.

scholarly journals Analyzing the Linkage between Agricultural Exports and Agriculture’s Share of Gross Domestic Products in South Africa

2016 ◽  
Vol 4 (1) ◽  
pp. 142
Author(s):  
Mushoni B. Bulagi ◽  
Jan J. Hlongwane ◽  
Abenet Belete
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Agricultural Economic ◽  
Capital Investment ◽  
Negative Relationship ◽  
Least Square ◽  
Series Data ◽  
Growth Equation ◽  
Positive Coefficient ◽  
Agricultural Exports

The paper analyses the link between avocado, apple, mango and orange exports and agriculture’s share of Gross Domestic Product in South Africa. The study used secondary time series data that covered a sample size of 20 years (1994 - 2014) of avocado, apple, mango and orange exports in South Africa. Two Stages Least Square models were used for data analysis.  Empirical results for agricultural exports equation revealed that agricultural economic growth in South Africa was significant with a positive coefficient. Also a negative relationship between the Net Factor Income (NFI) and the agricultural exports in South Africa was noticed. Real Capital Investments had a significant positive coefficient.  Consequently, results from agricultural economic growth equation revealed that agricultural exports were significant with a positive correlation. A relationship between NFI and agricultural GDP was also witnessed. Like other variables, Real Capital Investment was significant but negatively correlated.

scholarly journals Time-Varying Effects of Oil Supply Shocks on the US Economy

2013 ◽  
Vol 5 (4) ◽  
pp. 1-28 ◽  
Author(s):  
Christiane Baumeister ◽  
Gert Peersman
Keyword(s):  
Oil Price ◽  
Time Varying ◽  
Oil Supply ◽  
Us Economy ◽  
Supply Shocks ◽  
The Us ◽  
Short Run ◽  
Oil Demand ◽  
Substantial Decline ◽  
Oil Supply Shocks

Using time-varying BVARs, we find a substantial decline in the short-run price elasticity of oil demand since the mid-1980s. This finding helps explain why an oil production shortfall of the same magnitude is associated with a stronger response of oil prices and more severe macroeconomic consequences over time, while a similar oil price increase is associated with smaller output effects. Oil supply shocks also account for a smaller fraction of real oil price variability in more recent periods, in contrast to oil demand shocks. The overall effects of oil supply disruptions on the US economy have, however, been modest. (JEL E31, E32, Q41, Q43)

Investigating the non-linear Wagner’s hypothesis in South Africa

2017 ◽  
Vol 8 (4) ◽  
pp. 462-473 ◽  
Author(s):  
Temitope Lydia A. Leshoro
Keyword(s):  
Economic Growth ◽  
South Africa ◽  
Government Spending ◽  
Time Series Data ◽  
Series Data ◽  
Unique Contribution ◽  
Content Type ◽  
Non Linear ◽  
Regression Error ◽  
The Government

Purpose The commonly adopted view of the relationship between government spending and economic growth follows the Keynesian approach, in which government spending is considered to determine economic growth. However, there is another theory, which suggests that economic growth in fact determines government spending. This is Wagner’s hypothesis. The purpose of this paper is to investigate which of the two approaches applies to South Africa, and further observes the level of non-linearity between the two variables. Design/methodology/approach This study was carried out using quarterly time series data from 1980Q1 to 2015Q1. Granger causality technique was used to observe the direction of causality between the two variables, while regression error specification test (RESET) was employed to determine whether the variables exhibit linear or non-linear behaviour. This was followed by observing the threshold band, using two techniques, namely, sample splitting threshold regression and quadratic generalised method of moments. Findings The causality result shows that South Africa follows Wagner’s law, whereby government spending is determined by economic growth, supporting Odhiambo (2015). The RESET result shows that the variables depict a non-linear relationship, thus the government spending economic growth model is non-linear. It was found that if positive economic development is to be achieved, economic growth should preferably be kept within the −1.69 and 3.0 per cent band, and specifically above 1 per cent band. Originality/value The unique contribution of this study is that no previous study has attempted the non-linear government spending-economic growth nexus whether within the Keynesian or Wagner law for South Africa.

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