The relationship between savings and economic growth in Southern African customs union (sacu) countries
- Authors: Tala, Lavisa
- Date: 2023-04
- Subjects: Economic development--Southern Africa , Customs unions
- Language: English
- Type: Doctoral's theses , text
- Identifier: http://hdl.handle.net/10948/63111 , vital:73187
- Description: This study empirically investigates the nature of the relationship between savings and economic growth in SACU member countries, namely: South Africa, Botswana, Lesotho, Namibia, and Eswatini, using panel data for the period 1990-2021. A high savings rate is believed to be instrumental in stimulating economic growth, making it vital is for policy makers to understand the nature of the relationship existing between savings and economic growth in order to design and implement appropriate policies. To ensure robustness of the empirical results, this study applied different panel data estimation procedures. Using Pooled OLS, Random Effect, Fully Modified OLS, Dynamic OLS and Mean Group, Pool Mean Group and Dynamic Fixed Effect, the study discovered that gross domestic savings have a positive impact on economic growth among SACU member countries. Based on the results, gross domestic savings emerged with different coefficients indicating sensitivity to the estimation technique although statistically significant. Furthermore, the study dealt with the issue of linearity in the savings-growth nexus, by estimating the threshold level. Estimated results reveal evidence that gross domestic savings above 16 percent threshold have a negative effect on economic growth, while below the threshold, level savings impact economic growth positively. The study recommends, among other things, that policy makers design and implement policies that promote financial inclusion to mobilise domestic savings so as to increase economic growth. The major goal of economic policy should be to encourage households to save and ensure that domestic savings are invested in productive projects and sectors of the economy. , Thesis (PhD) -- Faculty of Faculty of Business and Economic Sciences, 2023
- Full Text:
- Date Issued: 2023-04
- Authors: Tala, Lavisa
- Date: 2023-04
- Subjects: Economic development--Southern Africa , Customs unions
- Language: English
- Type: Doctoral's theses , text
- Identifier: http://hdl.handle.net/10948/63111 , vital:73187
- Description: This study empirically investigates the nature of the relationship between savings and economic growth in SACU member countries, namely: South Africa, Botswana, Lesotho, Namibia, and Eswatini, using panel data for the period 1990-2021. A high savings rate is believed to be instrumental in stimulating economic growth, making it vital is for policy makers to understand the nature of the relationship existing between savings and economic growth in order to design and implement appropriate policies. To ensure robustness of the empirical results, this study applied different panel data estimation procedures. Using Pooled OLS, Random Effect, Fully Modified OLS, Dynamic OLS and Mean Group, Pool Mean Group and Dynamic Fixed Effect, the study discovered that gross domestic savings have a positive impact on economic growth among SACU member countries. Based on the results, gross domestic savings emerged with different coefficients indicating sensitivity to the estimation technique although statistically significant. Furthermore, the study dealt with the issue of linearity in the savings-growth nexus, by estimating the threshold level. Estimated results reveal evidence that gross domestic savings above 16 percent threshold have a negative effect on economic growth, while below the threshold, level savings impact economic growth positively. The study recommends, among other things, that policy makers design and implement policies that promote financial inclusion to mobilise domestic savings so as to increase economic growth. The major goal of economic policy should be to encourage households to save and ensure that domestic savings are invested in productive projects and sectors of the economy. , Thesis (PhD) -- Faculty of Faculty of Business and Economic Sciences, 2023
- Full Text:
- Date Issued: 2023-04
Fiscal, deficit, inflation, money supply and exchange rate in South Africa
- Authors: Tala, Lavisa
- Date: 2017
- Subjects: nflation (Finance) -- South Africa Foreign exchange rates -- South Africa , Money supply -- South Africa
- Language: English
- Type: Thesis , Masters , MPhil
- Identifier: http://hdl.handle.net/10948/23261 , vital:30502
- Description: This study empirically investigates the relationship between fiscal deficit, inflation, M3 money supply and the exchange rate in South Africa. The study makes use of quarterly macroeconomic time-series data sets comprising 84 observations, covering the period from 1994Q1 to 2015Q4. The unit root tests conducted employed the Augmented Dickey Fuller (ADF) and Phillips-Perron (PP) tests. The results reveal that the variables become stationary at first difference. The Johansen co-integration technique suggests that there is at least one co-integrating equation among the variables. The results of the Engle-Granger approach, which is residual based, show that the residuals are stationary, thus validating the existence of a long-run relationship between the model variables. The study carried out a Granger causality test. The results indicate that there is a strong Granger causal relationship between the variables (IF) and (FD). Another strong causal relationship emerges between inflation and money supply. The ECM model was employed to identify the speed of adjustment as a response to the departures from the long-run equilibrium path. The estimated coefficient of the ECM error term has the required sign and is statistically significant at the five per cent level of significance. The error term indicates a quick convergence to equilibrium. The study concludes that the dependent variable (FD) is jointly caused by all the independent variables in the long-run. The results of the variance decomposition of the variable (FD) to innovations resulting from IF, MS and RER indicate that own shocks remain the dominant source of total fluctuations in the forecast error of the variables. The findings of the study are efficient and reliable as the estimated model passed all the major diagnostic tests. By implication the findings suggest that the estimated model show high goodness of fit and is thus reliable for policy making. The study recommends a fiscal adjustment that will enhance economic growth. Additionally, a fiscal policy that will aim at identifying and mitigating other possible leakages that narrow the tax base should be considered.
- Full Text:
- Date Issued: 2017
- Authors: Tala, Lavisa
- Date: 2017
- Subjects: nflation (Finance) -- South Africa Foreign exchange rates -- South Africa , Money supply -- South Africa
- Language: English
- Type: Thesis , Masters , MPhil
- Identifier: http://hdl.handle.net/10948/23261 , vital:30502
- Description: This study empirically investigates the relationship between fiscal deficit, inflation, M3 money supply and the exchange rate in South Africa. The study makes use of quarterly macroeconomic time-series data sets comprising 84 observations, covering the period from 1994Q1 to 2015Q4. The unit root tests conducted employed the Augmented Dickey Fuller (ADF) and Phillips-Perron (PP) tests. The results reveal that the variables become stationary at first difference. The Johansen co-integration technique suggests that there is at least one co-integrating equation among the variables. The results of the Engle-Granger approach, which is residual based, show that the residuals are stationary, thus validating the existence of a long-run relationship between the model variables. The study carried out a Granger causality test. The results indicate that there is a strong Granger causal relationship between the variables (IF) and (FD). Another strong causal relationship emerges between inflation and money supply. The ECM model was employed to identify the speed of adjustment as a response to the departures from the long-run equilibrium path. The estimated coefficient of the ECM error term has the required sign and is statistically significant at the five per cent level of significance. The error term indicates a quick convergence to equilibrium. The study concludes that the dependent variable (FD) is jointly caused by all the independent variables in the long-run. The results of the variance decomposition of the variable (FD) to innovations resulting from IF, MS and RER indicate that own shocks remain the dominant source of total fluctuations in the forecast error of the variables. The findings of the study are efficient and reliable as the estimated model passed all the major diagnostic tests. By implication the findings suggest that the estimated model show high goodness of fit and is thus reliable for policy making. The study recommends a fiscal adjustment that will enhance economic growth. Additionally, a fiscal policy that will aim at identifying and mitigating other possible leakages that narrow the tax base should be considered.
- Full Text:
- Date Issued: 2017
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