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The welfare effects of government redistributive policy have been subject to considerable debate for decades. Against this background, this study explores the effect of government social spending on an empirically constructed measure of well-being in a panel of 16 upper middle-income countries and 38 high-income countries observed between 2002 and 2019. The study utilises the Generalised Method of Moments (GMM) Model to estimate the empirical relationship between government social spending and well-being. The results suggest that welfare gains in upper middle-income countries are derived from redistributive spending that prioritises schooling. On the other hand, rich countries are more likely to benefit from health-related spending. Based on the results the study confirms that disaggregated social spending in upper middle-income nations and wealthy nations does not impact aggregate well-being uniformly. Therefore, efforts to improve aggregate welfare through government redistributive spending ought to consider these attendant heterogeneities.

This study used the panel data from 15 emerging markets to examine the impact of restrictive macroprudential policies on income inequality from 2000–2019 using Bayesian panel vector autoregression and Bayesian panel dynamics generalised method of moments models. The chosen models are suitable for addressing multiple entity dynamics, accommodating a wide range of variables, handling dense parameterisation, and optimising formativeness and heterogeneous individual-specific factors. The empirical analysis utilised various macroprudential policy proxies and income inequality measures. The results show that when the central banks tighten systems using macroprudential policy instruments to sticker debt-to-income and financial instruments for lower-income borrowers (the bottom 40% of the income distribution), they promote income inequality in these countries while reducing income inequality for high-income borrowers (the high 1 percent of the income distribution). The impact of loan-to-value ratios was found to be insignificant in these countries. Fiscal policy through government expenditure and economic development reduces income inequality, while money supply and oil-price shocks exacerbate it. The study suggests implementing a progressive debt-to-income (DTI) ratio system in emerging markets to address income inequality among lower-income borrowers. This would adjust DTI thresholds based on income brackets, allowing lenient credit access for lower-income borrowers while maintaining stricter limits for higher-income borrowers. This would improve financial stability and reduce income disparities. Additionally, targeted financial literacy programs and a petroleum-linked basic income program could be implemented to distribute oil revenue to lower-income households. A monetary supply stabilisation fund could also be established to maintain financial stability and prevent excessive inflation.

This study analyses the impact of fiscal policy on the South African economy during the period 1972Q1-2020Q2. The study adopted quarterly time series data to estimate a Bayesian Vector Autoregression (BVAR) model with the selection of hierarchical priors. The variables employed for empirical investigation included GDP, government expenditure, public debt, and gross fixed-capital formation. The results of the study show that an unexpected shock in government expenditure and public debt has a significant negative and persistent impact on economic growth in South Africa, while an unexpected shock in investment has a significant positive effect on economic growth. The findings suggest that escalating public expenditure and public debt lead to economic contraction. This implies that policy-makers ought to be cautious of excessive government expenditure and public debt to achieve fiscal consolidation. Policy-makers ought to focus on addressing structural challenges through the implementation of sound structural reform policies that aim to attract investment consistent with job creation, development and growth in South Africa’s economy.

This study interrogates asymmetric effect of public debt on economic growth among selected emerging and frontier SADC economies. The study estimates a smooth transition regression (STAR) to analyse asymmetric relationship between public debt and economic growth using time series data from 2000 to 2018, extracted from the World Development Indicators. The findings indicate a strong evidence of a significant asymmetric relationship between public debt and growth among emerging and frontier SADC members under consideration. The results revealed the inverted U-Shape effect of public debt on growth in South Africa. While the results for Botswana, Namibia, Zambia and Zimbabwe indicate that there is a U-Shape relationship between public debt and economic growth. The study suggest that policymakers ought to consider curbing public debt level within a sustainable threshold target in order to reduce accompanying debt serving costs, and efficiently use public finances consistent with sustainable economic expansion.

From 1990 to 2019, this study examines the nonlinear dynamic impact of financial development on income inequality in an unconventional policy regime in a panel of 21 African countries. More importantly, we use Panel Smooth Transition Regression to extend the existing debate on this subject, with roots back to the seminal work of G-J and many others, and add a twist by distinguishing between a conventional (1990–1999) and unconventional policy regime (2000–2019), as well as the threshold level at which financial development reduces inequality. Our baseline results will be supported by the Generalized Method of Moments. The PSTR model was chosen because it can account for features that dynamic panel techniques cannot, such as endogeneity, homogeneity, cross-country variability, and time instability within the model. We found evidence of a non-linear effect between the two variables, with the threshold found to be 21.90% of GDP, below which financial development reduces inequality in Africa, and this confirms the U-shape in unconventional policy regimes and the G-J in conventional policy regimes. Unconventional monetary policies were found to trigger the financial-inequality relationships. The focal policy recommendation is that the financial sector be given adequate consideration and recognition by, inter alia, implementing appropriate financial reforms, developing an adequate investment strategy, and maintaining spending on science and technology investment in African countries below the threshold. Again, when implementing unconventional monetary policies in African countries, extreme caution is required.

In response to the “Great Recession and Global Financial Crisis”, central banks had to deploy unconventional monetary policies (UMP) in order to fight the severe impact of the crisis. Therefore, the purpose of this study is to examine the dynamic shock of unconventional monetary policies through earning heterogeneity, income composition, and portfolio channels on income inequality in emerging economies covering the period 2000–2019, using the panel vector autoregressive (PVAR) model. A PVAR model was designed for this study because of its ability to address the dynamics of numerous entities considered in parallel. The findings suggest that the UMPs used by these countries’ central banks may have increased income inequality through all of the channels investigated in this study, as a shock to unconventional monetary policy results in a positive response in income inequality. Even when pre-tax income, held by the top 10%, is adopted to measure income inequality, the study yields similar results. It is evident that a central bank’s objective is and should be to fulfil its mandate of achieving maximum employment and price stability, thus bringing wide economic benefits. Thus, some forms of policies are more appropriate for addressing concerns about inequality (income policy or fiscal policy) than others. However, the current study alerts the central bank to the fact that monetary policies may have a wounding impact on income inequality. Therefore, the central banks should consider the cost of monetary policies on income inequality when drafting or implementing these kinds of policies.

This study analyses the nonlinear dynamic impact of economic development on income inequality in a prudential policy regime in a panel of 15 emerging markets from 1985–2019. More importantly, we seek to extend the existing debate on this subject, with roots back to the seminal work by Kuznets and many others, and add a twist by introducing a distinction between a prudential regime (1985–1999) and a non-prudential regime (2000–2019), as well as the threshold level at which economic development reduces inequality, using Panel Smooth Transition Regression (PSTR). The Generalized Method of Moments and fixed-effect models will be used to support our baseline results. The PSTR model was adopted due to its ability to deal with features that cannot be accounted for in dynamic panel techniques, such as endogeneity, homogeneity, cross-country variability, and time instability within the model. We found evidence of a non-linear effect between the two variables, where the threshold was found to be US$13,800, above which economic development reduces inequality in selected countries, and this further confirms the Kuznets inverted U-shape in both regimes. Macroprudential policies were found to trigger development-inequality relationships. Our evidence largely suggests that policymakers ought to formulate policies that aim to attract investment, which will then create job opportunities and foster an improvement in the stan-dard of living, and also should be abreast of the level of economic development before implementing macroprudential policies.

Orientation: South Africa is experiencing growth in its graduate labour force, but graduateunemployment is rising with the overall unemployment rate. Graduate unemployment isproblematic, because it wastes scarce human capital, which is detrimental to the economy inthe long run. Research purpose: This study explores the perceived causes of graduate unemployment fromthe perspective of the South African banking sector. Motivation for the study: Researchers have conducted various studies on graduateunemployment in South Africa and across the globe, but few studies have beenconducted on the causes of graduate unemployment. There appear to be some gaps in theliterature; therefore, other problems and solutions to graduate unemployment have to beexplored Research approach, design and method: The researchers followed a survey design. Questionnaires and face-to-face interviews were used as research instruments to identify theperceived causes of graduate unemployment in the banking sector of South Africa. Researchparticipants were unemployed graduates, recently employed graduates and graduaterecruitment managers in the banking sector. Main findings: The study shows that several factors are perceived to be the causes of graduateunemployment in the South African banking sector. These include: skills, institution attendedby graduate and differences in expectations from employers and graduates.Practical/managerial application: The findings have implications for educational institutionsand companies that are encouraged to consider possible solutions to resolving the causes ofgraduate unemployment. Contribution/value-add: This study is one of the first papers to investigate the causes ofgraduate unemployment in the South African banking sector. It provides a rich platform forfurther studies and replication in other sectors, especially within the African context.