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.
Post-Doctoral Fellowship: Macro-Finance
A two-year post-doctoral research position in Macro-Finance is available at the Department of Economics for a researcher interested in working on financial factors in business cycles: asset markets, credit, liquidity, and macro-prudential policy. Further details available here.
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.
Andrew Donaldson: Should the South African government redistribute more?
At his annual lecture in the Department on Monday, 7 April, Andrew Donaldson, Deputy Director General responsible for Public Finance in South Africa's National Treasury and Honorary Professor in the Department of Economics, asked whether South Africa should increase redistribution through the budget. Citing an IMF study, he noted that there is mounting evidence that, contrary to economic theory, greater redistribution does not have an adverse effect on economic growth. His provocative question resulted in an interesting debate. In the above photo, Prof. Donaldson (top left) listens to a question from the floor.
Research on markets and social policy feature in Stellenbosch University Research Yearbook
Two members of the department, Prof Servaas van der Berg and Dr Willem H. Boshoff, received recognition for their outstanding research in the annual Stellenbosch University Research Yearbook.
Prof Van der Berg is the NRF Chair in the Economics of Social Policy and is highly respected for the way he uses analytical tools to study subjects like poverty, inequality, income distribution, public finance, social spending, labour markets, migration, regional development and social policies. This he does in an effort to put rational facts and figures behind changes in education, health matters and social grants. Read the full report here.
Dr Boshoff's research tries to expand the understanding of competition in markets. It employs novel statistical techniques to help solve legal problems in South Africa and elsewhere and contributes to a more competitive and healthy economy. Read the full report here.
Michael Jordaan: 'Economics needs new theories that try to incorporate free'
Michael Jordaan, former CEO of FNB and now honorary professor in the Department, gave his first public lecture on Thursday night in the Department of Economics. He discussed the costless economy (such as Google and Facebook) and the implications for the measurement of GDP, inflation, etc when services are free. Here is Prof Jordaan (second from left) with prof Stan du Plessis (dean), prof Rachel Jafta, organiser of the public lecture, and department chair prof Andrie Schoombee.
Top student recognises effort of first-year lecturer
Eldridge Moses (left), a first-year lecturer in the department, was recognised by top performing student Purishlin Govindasamy for his contribution to his study success in 2013. Both attended a First-year Prestige Function on May 19 where Stellenbosch University's top first-years of 2013 were recognised for their efforts, and where their favourite lecturers were invited to share in their success.
Top economics students recognised
The Department recently recognised the achievements of the best students in Economics at its annual prizegiving ceremony at Moore's End in the Dwarsrivier Valley.
Chris Hart was the top postgraduate student in 2013, and won the SA Cloete medal (best postgradute student in economics) for his achievement of an aggregate 81% for his Honours degree studies in 2013. He also received the Ibn Khaldun medal and a cash prize from Genesis Analytics (handed over by Sibonakaliso Mavuka of Genesis, pictured right).
In the undergraduate category, Lewis McLean was the winner of the SA Cloete medal (best undergraduate student,based on performance in all three years of undergraduate studies), here handed over by the Department's Head, Prof Andrie Schoombee.
Lewis also won a cash prize, book and certificate from Genesis Analytics as he is also the best third year student (aggregate mark of 80.5%) and he is currently continuing his studies in economics in the Honours degree programme at Stellenbosch.
Prizes were also awarded to the top students in first and second place in each of the three undergraduate years as well as Honours and Masters. In the picture to the right is Jurie Germishuys, best first year student and Katrien Smuts, second place winner in second year economics. Below is Albertus van Niekerk, best Master's student.
Department appoints four new Research Associates
Dr. Alexander Moradi, Dr. Trudy Owens, Dr. Stephen Taylor, and Dr. Francis Teal were recently appointed as Research Associates in the Department of Economics. The four new appointees join our six existing Associates - Julius Agbor, Leigh Gardner, Martine Mariotti, Caryn Bredenkamp, Mariné Erasmus and Ramos Mabugu - and will serve a three-year term.
Alex Moradi is a development economist and economic historian at the University of Sussex, UK. His research has mostly investigated the causes and consequences of undernutrition and poor health in developing countries.Trudy Owens is a development economist at the University of Nottingham, UK. Her primary focus is on poverty, growth and non-governmental organisations of African countries. Stephen Taylor is an education expert in South Africa's Department of Education. He is also a former PhD student in the Department, and his research continues his interest in South Africa's underperforming education system. Read an interview with him here. Francis Teal was the Deputy Director of the Centre for the Study of African Economies at Oxford University from 1996 to 2012. His focus is on the analysis of firms and labour markets in Africa.
Lant Pritchett visits Stellenbosch
Lant Pritchett, a professor at Harvard Center for Global Development and the Harvard Kennedy School of Government visited ReSEP and the Department of Economics from 16 to 26 January 2014. He is widely known for his innovative and path-breaking work in development in areas such as education, health and social delivery. During his visit, Professor Pritchett presented a number of seminars, spent two days in a ReSEP workshop on education, health and the labour market and then interacted in small group discussions with ReSEP researchers and Department of Basic Education officials around these topics.
Prof. Pritchett's most recent book, The Rebirth of Education: Schooling ain’t Learning, investigates the low learning trajectories that are so common in developing countries and shows that input-based approaches to school, or simply focusing effort on getting more children to school or keeping them in school longer, will contribute little to reducing the learning deficit of most developing countries compared to developed countries. He was thus very enthusiastic about ReSEP research that draws similar conclusions for South Africa and also other countries in Southern and Eastern Africa.
Prof Stan du Plessis appointed as Dean
Stan du Plessis, professor in the Economics Department and current vice-dean (research), has been appointed as the new dean of the Faculty of Economic and Management Sciences from 1 April 2014.
Among other aims, he endevours to focus on strengthening the Faculty's research profile through external collaboration and expanding the number of doctoral students in the faculty.
The Department is confident that Prof du Plessis will continue to achieve excellent results in the faculty (as he has done in the Department) and looks forward to continue working closely with him in his new position.
(See also the University's announcement).
Racial Inequality Declines to its Lowest Levels Yet
A comprehensive, two-year long interdisciplinary study by researchers from ReSEP and the Political Science department at Stellenbosch University found that the income gap between race groups is the lowest it has ever been. According to ReSEP member Servaas van der Berg it is no longer true that South Africa’s middle class is mainly white, since black South Africans now represent the largest share of the middle class. Click here for details.
researchers from ReSEP and the Political Science department at
Stellenbosch University found that the income gap between race groups is
the lowest it has ever been. According to ReSEP member Servaas van der Berg it
is no longer true that South Africa’s middle class is mainly white,
since black South Africans now represent the largest share of the middle
class. - See more at: http://resep.sun.ac.za/#sthash.s5EblOba.dpufA comprehensive, two-year long interdisciplinary study by researchers from ReSEP and the Political Science department at Stellenbosch University found that the income gap between race groups is the lowest it has ever been. According to ReSEP member Servaas van der Berg it is no longer true that South Africa’s middle class is mainly white, since black South Africans now represent the largest share of the middle class. - See more at: http://resep.sun.ac.za/#sthash.s5EblOba.dpuf
Horizontalists and Verticalists: 25 years later
The latest issue of the Review of Keynesian Economics includes a special mini-symposium honouring the 25th anniversary of Basil Moore's book, Horizontalists and Verticalists (1988). Basil Moore is Professor Extraordinary in the Department of Economics at Stellenbosch University.
The book has been particularly influential in advocating a "horizontalist" view of monetary policy, which is that in a credit-based economy, the money supply is endogenous and determined by demand, and not by central bank supply of high-powered money, as the "verticalists" believe. In one of the mini-symposium articles, the authors' (Bindseil and König) assessment is that "the book has impressively stood the test of time and, despite part of textbook economics still insisting on the money multiplier as an explanation for the money supply, it is not much of an exaggeration to say that we have all become ‘Horizontalists’ in the last 25 years."
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/.