Welcome to the Department
Welcome to the Department of Economics at Stellenbosch University. We are one of the oldest Economics departments on the continent and one of the largest in the university. We are dedicated to quality research and teaching, with a focus on economic issues pertaining to South Africa and Africa. For any information not on this site, please contact the department.
Macro research team members at the 5th macro and monetary economics workshop
Last week some members of our macro research team, accompanied by the team leader Prof. Guangling Liu, attended the 5th macro and monetary economics workshop at the South African Reserve Bank. Dr. Fernando García Barragán (1st left) presented one of his recent research articles, titled ‘The welfare cost of bank capital requirements with endogenous default’, at the workshop. Mr. Hilary Patroba (2nd left) presented one of the chapters from his PhD thesis: ‘South Africa’s real business cycles: permanent versus transitory shocks’. Miss Anna Orthofer (3rd left) and Mr. Chris Garbers (5th left) are first year PhD students at the department. Anna’s research topic is ‘Savings, wealth and its distribution in South Africa’ and Chris’ thesis title is ‘Essays on credit cycles’. They both presented their preliminary research results at the workshop. Dr. Hylton Hollander (4th left) obtained his PhD degree last December. The title of his thesis is ‘Financial frictions and the business cycle’. He is currently holding a postdoctoral fellowship at the University of Cape Town. He presented one of the chapters from his thesis at the workshop as well.
LEAP members attend World Economic History Congress in Kyoto
Several staff, students and research associates from the Department's Laboratory for the Economics of Africa's Past (LEAP) attended the trienniel World Economic History Congress in Kyoto, Japan from 3 to 7 August. Three Stellenbosch students, Jeanne Cilliers, Christie Swanepoel and Bokang Mpeta, presented their research. Johan Fourie, who completed his PhD at Utrecht University in 2012, was a finalist in the dissertation session on early-modern history. He was announced the winner of this category on Friday night at the closing ceremony.
At the conference venue in Kyoto: Martine Mariotti (research associate), Dieter von Fintel, Bokang Mpeta, Sophia du Plessis, Christie Swanepoel, Jeanne Cilliers, Abel Gwaindepi and Johan Fourie
Recent working papers
The following working papers were recently added to the Stellenbosch Working Paper Series:
In "Do Long Memory and Asymmetries Matter When Assessing Downside Return Risk?", Nico Katzke and Chris Garbers test whether, on sector level, returns series in South Africa exhibit long memory and asymmetries and, more specifically, whether these effects should be accounted for when assessing downside risk. Their findings confirm that controlling for asymmetries and long memory in volatility models improve risk management calculations.
Hendrik van Broekhuizen uses aggregate data from the Higher Education Management Information System (HEMIS) to analyse the trends and underlying correlates of first-time enrolments and graduations in initial teacher education (ITE) programmes in the public higher education system between 2004 and 2013 in "Teacher Supply in South Africa: A Focus on Initial Teacher Education Graduate Production".
Finally, in "Identifying Periods of US Housing Market Explosivity", Mehmet Balcilar, Nico Katzke and Rangan Gupta apply several robust techniques that allow them to identify periods in which US housing prices start to exhibit explosivity with respect to its past behaviour and when it recedes to long term stable prices.
Department's research featured in University publication
Three studies undertaking by Economics Department researchers are featured in the latest Research at Stellenbosch University 2014 publication.
The first study, by Neil Rankin, investigates youth employment in South Africa. It shows that many young people lack work experience or other signals which can help employers identify their productivity.
A second study, undertaken by ReSEP, showed how Grade R increases instead of reduces inequality in South Africa's schooling system.
A third study, by Johan Fourie and Dieter von Fintel, shows how French Huguenots maintained an advantage in wine-making for nearly a century after their arrival at the Cape in 1688.
Graduate School scholarships for PhD study
The Faculty of Economic and Management Sciences is now accepting applications for PhD scholarships for students commencing their studies in 2016. Succesful candidates can be funded for three years of full time studies. Please see details here and note in particular the research themes in Economics that are eligible for the programme. The deadline for applications (including referee reports) is 31 July 2015.
Department mourns death of Prof Black
Philip Black, professor of Economics at Stellenbosch University between July 1988 and December 1990, passed away on 19 June 2015 at his home in Cape Town. Professor Black was well-loved by his students and highly respected by his peers. After his initial stint at Stellenbosch Economics, he was from 1993 contracted by the department on a part-time basis to teach and provide research supervision to postgraduate students. His association with Stellenbosch Economics was more formalised in 2002 when he was appointed as a Professor Extraordinary for a three-year period, still on a part-time basis. This appointment has numerous times been renewed and he was serving a term ending December 2016 at the time of his death.
During his career, Philip Black was also Jagger Professor of Economics and Director of the School of Economics at the University of Cape Town, as well as Professor and Head of the Department of Economics and Economic History at Rhodes University. In addition to his academic career, Professor Black held positions as Research Director of the Corporation for Economic Research (CER), of the Africa Institute for Policy Analysis and Economic Integration (AIPA), and of the South Africa Foundation. During the early 1990’s he served on the Economic Advisory Council of State President FW de Klerk and was also a member of the Committee for Economic Sciences of the Human Sciences Research Council. He served a term in a part-time capacity as Chief Economist at the Department of Economic Development and Tourism of the Western Cape Government. Professor Black was also a past Managing Editor of the South African Journal of Economics and a past President of the Economic Society of South Africa.
Post-doc in Macroeconomics joins Department
The Department is happy to announce that from the beginning of June 2015, Fernando García Barragán is a post-doctoral fellow within the macroeconomic research cluster of the Department. He has received his undergraduate degree in Economics from the University of Guanajuato, Mexico. He holds a PhD in Economics from the Catholic University of Milan, Italy and also spent time as a PhD student visiting scholar at the Observatoire Français des Conjonctures Économiques, France. His main research fields are macroeconomics, DSGE models, financial intermediation and central banking.
Stellenbosch alumni ranked high by Financial Mail
Economics professor and Dean of the Faculty of Economic and Management Sciences, Prof Stan du Plessis, has been ranked first in the category Innovative Research Analyst in the annual Financial Mail Ranking of financial market analysists. In addition to his position as Dean, Prof Du Plessis works part-time as an economist for Prescient Securities.
Published last week, the Financial Mail's rankings, now in their 38th year, recognise the most successful analysts in the financial industry in South Africa.
Other alumni of the Economics department performed equally well. Deanne Gordon was ranked fourth in the Investment Strategy category, Carmen Nel and Ilke van Zyl was ranked third in the Domestic Economic Trends category, with Sonja Keller ranked fourth in the same category. And DeWet Schutte was ranked second in the Hotels, Travel & Leisure category.
The full report can be downloaded here. We congratulate our alumni for their fine achievements this year.
Laboratory for the Economics of Africa's Past (LEAP) launched at Stellenbosch
South African research into economic history has gained momentum with the launch of the Laboratory for the Economics of Africa's Past (LEAP) at Stellenbosch University on Wednesday, 27 May.
"LEAP brings together scholars and students interested in understanding and explaining the long-term economic development of Africa's diverse societies," says Dr Johan Fourie of the Department of Economics.
"Studying the historical development of an economy provides a context for existing challenges and a source of hypotheses to explain the trajectory of its evolution."
Staff members complete PhDs
Three staff members, Dr Dieter von Fintel, Dr Krige Siebrits and Dr Marisa von Fintel, graduated with PhDs in Economics at Stellenbosch University’s two most recent graduation ceremonies. In the December 2014 ceremony, Dieter von Fintel received his PhD under supervision of Rulof Burger, with Servaas van der Berg as co-supervisor. The title of his thesis was 'Spatial heterogeneity, generational change and childhood socioeconomic status: microeconometric solutions to South African labour market questions'. Krige Siebrits received his PhD under the supervision of Estian Calitz. The title of his thesis was 'The influence of fiscal policy-making frameworks on fiscal outcomes: evidence from the European Union'. Marisa von Fintel received her PhD under the supervision of Servaas van der Berg, with Rulof Burger as co-supervisor. Her title was 'Social Mobility in post-apartheid South Africa'. More information about their PhDs and the other graduates from the department are available here.
Stellenbosch participates in World Econometric Championship
Stellenbosch University was selected as one of thirty teams to participate in the 2015 World Econometric Championships hosted by the VSAE of the University of Amsterdam from the 31st of March to the 2nd of April. This championship has attracted teams from Harvard University, Oxford University, and the University of Copenhagen. The participants are challenged to apply the latest econometric techniques on real world problems presented by the case maker and are adjudicated by a jury. This year the case dealt with longevity and longevity risk. On the first round, the teams were required to model the life expectancies and survival probabilities given the circumstance of the ageing population. In the second round, the top ten teams had to consider ways to mitigate risks in longevity. The Stellenbosch University team consisted of Laurie Binge, Nwabisa Makaluza (captain), Dimitar Popov and Lewis McLean (pictured). We congratulate the University of Maastricht on being the World Champions of Econometrics in 2015.
Stellenbosch hosts 2015 Postgraduate Conference
The Department of Economics is proud to host the annual Western Cape Economics Postgraduate Student Conference on the 15th of April 2015. During this conference, postgraduate students from the University of the Western Cape (UWC), the University of Cape Town (UCT) and the University of Stellenbosch (US) are given an opportunity to present their latest research to a wider audience. Please refer to the conference webpage for more information on the speakers and their topics.
Kuben Naidoo appointed as vice president of the South African Reserve Bank
President Jacob Zuma has appointed Mr Kuben Naidoo as a Deputy Governor of the South African Reserve Bank for a period of five years with effect from 1 April 2015.
Best students celebrated at Molenvliet ceremony
On Wednesday, 18 March the Department held its annual postgraduate welcome function at the historic Molenvliet guest house. Department head prof Andrie Schoombee (pictured) awarded the best undergraduate and postgraduate students of 2014 prizes for their excellent academic achievements during the previous year.
The prizes went to: Gerben Draaijer and Niel Botha (first year), Purishlin Govindasamy and Aldu Duminy (second year), Charne Thomson (pictured) and Katrien Smuts (third year), Lewis McLean and Reuben Foster (Honours), and Chris Hart and Wicus Coetzee (Masters).
Several Economic Research Southern Africa and Genesis Analytics prizes were also awarded to top-performing students.
Cobras player graduates with Honours degree in Economics
Omphile Ramela, a cricket player for the Cape Cobras, was one of the Honours (Economics) students to graduate at the December graduation ceremony yesterday. Ramela completed his undergraduate studies in PPE, did an Honours in Philosophy and then decided to do another Honours degree, this time in Economics. His Honours dissertation compared the economic institutions of the Zulu and Tswana cultures.
Ramela has had to juggle his course commitments with playing professional cricket. In September, he traveled with the Cape Cobras team to India to play in the Champions League. He has been a stalwart in the Cape Cobras RamSlam T20 team since then, scoring the third most runs in the team and 14th most in the tournament. The Department wishes him the best for the final match in the competition on Friday night.
Research project wins prestigious award
A joint research project on Youth Wage Subsidies in South Africa undertaken by researchers from the Universities of Stellenbosch, Witwatersrand and Yale, and lead by prof Neil Rankin, recently won the Poverty Reduction Equity and Growth Network (PEGNet) Best Practice award for 2014 at a conference in Lusaka, Zambia. A committee consisting of Ms Sonja Kurz from the Deutsche Gesellschaft fuer Internationale Zusammenarbeit (GIZ), Mr Shebo Nalishebo, from our local host, the Zambia Institute for Policy Analysis and Research (ZIPAR), Ms. Natascha Weissert from the German Federal Ministry for Economic Cooperation and Development (BMZ) and Mr. Manfred Wiebelt from the Poverty Reduction Equity and Growth Network (PEGNet) chose this project, over a number of others, because of its effective interaction between research and practice and its success in translating research into action. They were particularly impressed by how the research undertaken as part of this project helped inform the design and implementation of South Africa’s Youth Employment Tax Incentive which was introduced in January 2014.
Young Economist Competition 2014
The Department of Economics has again hosted the annual Young Economist Competition, sponsored by Die Burger, for first year students in Economics at three Cape universities. Participants in the competition, in teams of two students each, make forecasts on economic data such as inflation rates, the GDP growth rate, interest rates and (most daringly) exchange rates. For each forecast, points are awarded for accuracy once the actual data have been revealed; the overall winners are those at the end of the competition with the highest scores. For the first time, the winners of the competition (centre team in picture) were from the University of Cape Town, Rushin Ryan Galant and Chidochashe Mahofa. Chidochashe Mahofa says she "had a fun experience and competing with more universities was more challenging but more exciting as well". The runners up (right in picture), U Machiu and VP Dlamini were from Stellenbosch University and in third place (left in picture), from Cape Town, were Blake James Player and Joshua Luke Gilson.
Stellenbosch student awarded ESSA prize for best PhD
Stellenbosch University is once again fortunate to have one of its doctoral students, Rudi Steinbach, win the 2014 ESSA Founder's Medal for best Doctoral Thesis in Economics in South Africa. This year, the prize was awarded to two candidates of which the other was J.P Visagie from the University of KwaZulu-Natal.
Rudi Steinbach's entry was entitled, "Essays in Dynamic Macroeconomics", and his supervisors were Prof Ben Smit and Prof Stan du Plessis. In this work, he constructed and estimated three closely related Dynamic Stochastic General Equilibrium (DSGE) models of the South African economy. The first of these is based on the canonical New Keynesian DSGE model used by many leading central banks, but with an accounting for all of the components of aggregate demand. The second model extends the first to include a complete characterization of the South African yield curve (thus addressing the criticism of "only one interest rate" in such models) and the third model incorporates a banking sector to account for the type of interactions observed to be critical in the recent global financial crisis (but not incorporated in standard models). The end result respresents the state of the art in this type of modeling in South Africa and reflects the latest thinking internationally on how to model the events of recent years from a dynamic macroeconomic perspective.
New Book by Prof Sampie Terreblanche
Sampie Terreblanche, retired professor formerly at the Department of Economics, has published a new book, "Western Empires, Christianity, and the Inequalities between the West and the Rest (1500-2010)".
In the book, Prof Terreblanche takes a critical look at how social and economic inequality became entrenched in the current world order dominated by Western powers since the 1500s. The book also offers the thesis that unrestrained capitalism lies at the root of the unsustainability of the Western empires, as they end up with growing inequality, environmental damage and unmanageable financial market risks.
The book is available at bookstores or at kalahari.net.
Grade R may lead to further inequality, says ReSEP researchers
The Department of Performance Monitoring and Evaluation has released a major new study undertaken by ReSEP, a social policy research unit within the Department of Economics, on the effect the introduction of Grade R in most schools has had on learning outcomes in subsequent grades. It is widely accepted that early learning programmes are the most appropriate interventions to overcome the disadvantages faced by children from poor home backgrounds. But the Report found that "…the impact of Grade R in South Africa is small and there is virtually no measurable impact for the poorest three school quintiles, while there are some impacts for the higher quintile schools. Thus, instead of reducing inequalities, Grade R further extends the advantage of more affluent schools. Grade R impacts convert to only 12 days of normal learning gains in maths and 50 days in home language (for a school year of 200 days)". The full report is available here.
Ian Stuart appointed as Research Associate
The Department has recently appointed Ian Stuart, Acting Chief Director for the Fiscal Policy Unit, Budget Office in the National Treasury as a research associate for a three year period. Mr Stuart and his team are responsible for South Africa's fiscal framework, budget documents, fiscal policy research and advice to the Minister of Finance. Two working papers that have resulted from Mr Stuart's recent research collaboration with the Department are available: "The accuracy of fiscal projections in South Africa" and "Enhancing the credibility of fiscal forecasts in South Africa: Is a fiscal council the only way?".
Poverty of South Africa's children investigated
The South African Human Rights Commission (HRC) yesterday released its report on poverty traps and social exclusion among children in South Africa. The report was written by members of ReSEP, the research group for Social and Economic Policy within the Department of Economics. The report examines the extent of poverty, inequality, and exclusion among South African children, the characteristics of the most vulnerable groups of children, and the efficacy of existing policies designed to reach those children.
The full report can be downloaded here.
Economics research featured in 2013 Research Report
Research by Rulof Burger, Servaas van der Berg and Dieter von Fintel (How Education Policies Added to Joblessness) and Marisa Coetzee and Ronelle Burger (Bridging the Social Divide with Trust) has been featured in the latest issue of the Stellenbosch University's Research Report.
Rulof Burger and co-authors show that the sharp increase in unemployment numbers in the 1990s may have been due to a change in school policies rather than a weak economy. In 1998, schools were no longer allowed to accept pupils more than two years older than their grade. This forced a large number of pupils into the labour market, increasing unemployment by between 400 000 and 900 000 individuals. The full paper is available here.
Coetzee and Burger show that households where one member is a domestic worker attain higher standards of living than households at similar levels of income but which do not have a member of a household employed as a domestic worker. This shows the importance of 'linking ties' in the process of economic upliftment. The full paper is available here.
Servaas van der Berg appointed SU Distinguished Professor
The University recently recognized a group of about 30 professors as Distinguished Professors with a view to acknowledging exceptional academic excellence. The Department of Economics is privileged to have one of those honoured, namely Servaas van der Berg, on its staff.
The criteria for eligibility include "continuous excellent performance over the last three years; international stature; proven exceptional performance and leadership in higher education in research and publications, postgraduate study leadership, learning and teaching, and community interaction."
More information available here.
Stan du Plessis ranked 4th for Innovative Research by Financial Mail
Prof Stan du Plessis, Dean of the Faculty of Economic and Management Sciences and Professor in Economics, has been ranked 4th in the category Innovative Research in the Financial Mail's latest Ranking the Analysts survey.
In addition to his position as Dean, Du Plessis works part-time as an economist for Prescient Securities.
Published in May 2014, the survey report states that "navigating your way to the top of the pile takes fortitude, investment and dogged focus. The Financial Mail's rankings, now in their 37th year, recognise those who have succeeded."
See the university's press release.
Interview with Servaas van der Berg
The head of RESEP, Professor Servaas van der Berg was recently interviewed by Nic Spaull - a graduate student in the Economics Department and a RESEP researcher - as part of Nic's ongoing Q&A series. Two other RESEP researchers have also participated in the series - Martin Gustafsson and Stephen Taylor.
'Inequality likely to stay'
The Conversation, a British online forum, published a piece today by prof. Servaas van der Berg on South Africa's future prospects. His notes that 'high inequality probably will remain a feature of South African society for decades to come, at least until education and services radically improve and their benefits are felt in the labour market'. The full piece can be read here. The piece was published on 7 May, the day millions of South Africans will vote in the country's fifth democratic elections. The picture shows the queue in front of Stellenbosch city hall early on Wednesday morning.
ReSEP website launched
The Research on Socio-Economic Policy (ReSEP) group at the Department of Economics today launched a new website which will serve as a resource for researchers and policy-makers interested in issues surrounding socio-economic development in Southern Africa. Spearheaded by Professor Servaas van der Berg, the ReSEP group consists of members of the Department of Economics, contract research staff and graduate students, and developed around a long term research focus on issues of poverty, income distribution, social mobility, economic development and social policy. The new website contains information on ReSEP’s involvement in various research projects, provides access to downloadable working papers, policy briefs, and other research reports produced by members of the ReSEP team, and will in time also provide access to further learning and training materials for policy-makers, researchers, students and others interested in policy debates. Visit the new website at http://resep.sun.ac.za/.