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.