Faculty of Commerce, Law and Management (ETDs)
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Item Is the Fed Hindering Development? Impacts of US interest rates on growth, income distribution and macroeconomic policy space in developing countries: a demand-led growth model(University of the Witwatersrand, Johannesburg, 2023) Vaz, João Emboava; Hein, Eckhard; Lavoie, Marc; Tinel, BrunoThe US Fed has responded to recent inflation pressures with the most rapid interest rate hike since the 1979-82 Volcker’s disinflation. The hike in the beginning of the 1980s was followed by harsh external crises in the developing world, especially in Latin America. The current situation adds tot that the role the US monetary policy plays on quickly shifting massive capital flows in a world of open and volatile capital accounts (Rey, 2015). On the other hand, interest rate levels remain low on historical levels and developing countries come from decades of relative growth and record international reserve accumulation. Following the recent development in external policy space debates, this thesis aims to understand how a deterioration of external conditions, especially through higher foreign interest rates, may impact growth, income distribution, and macroeconomic policy space in developing countries.Item Oil shocks and macroeconomic policy uncertainty in South Africa(University of the Witwatersrand, Johannesburg, 2023) Makanda, Samantha; Fasanya, IsmailThe study reevaluates the connection between oil shocks and macroeconomic policy uncertainty in South Africa over the period of 1990M1 to 2022M6 using spillover connectedness frameworks and Quantile-on-quantile regression analysis. The link between oil shocks andmacroeconomy rests on the Neoclassical theory following the Hamilton (2005) production function framework. The following findings are apparent from the analysis. First, the average- based connectedness framework shows a moderate connection between oil shocks and macroeconomic policy uncertainty parameters. Economic policy uncertainty and political uncertainty exhibit the most prominent bi-directional spillovers, while political uncertainty and oil consumption demand shocks function as net spillover transmitters. However, using the quantile approach, the level of connectedness between oil shocks and macroeconomic policy uncertainty parameters is stronger and much higher at both tails of the conditional distribution. Specifically, the study finds that macroeconomic policy uncertainty parameters act as net receivers at lower quantiles, while all the oil shocks and financial policy uncertainty act as net receivers at median quantiles, and economic activity shocks and oil inventory demand shocks act as net receivers at upper quantiles. Thus, the application of the average based framework of connectedness is inadequate and restrictive. Finally, using the Quantile-on-Quantile regression analysis, the results demonstrate a substantial positive (negative) relationship between the upper quantiles of oil shocks and the lower (upper) quantiles of macroeconomic policy uncertainty. These findings suggest that policymakers keep an eye on the repercussions of oil shocks on macroeconomic conditions and develop monitoring frameworks that will help to predict the likely effects of external shocks emanating from oil. Simultaneously, investors should contemplate modifying their investment strategy regarding the circumstances and keep an eye on oil prices, government policies, and economic indicator