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PurposeThe primary purpose of the study is to analyse the asymmetric effects of public debt on economic growth, using secondary data over the period 1980–2018 in South Africa.Design/methodology/approachThis study estimated a Smooth Transition Regression (STAR) and Nonlinear Autoregressive Distributed Lag (NARDL) approach, using time series data to analyse the asymmetric effect of public debt on economic growth in South Africa.FindingsThe findings revealed a significant nonlinear relationship between public debt and economic growth in South Africa. The results showed an inverted U-Shape relationship, implying a significant positive influence of public debt on economic growth during the low-debt regime. While during a high-debt regime, public debt exerted a significant negative effect on economic growth. The study proposes that policymakers ought to consider targeting a sustainable debt threshold that would enhance efficient use of public finances consistent with long-term economic prosperity.Originality/valueThis paper asymmetries and threshold effects between public debt and economic growth in South Africa, through the application of dynamic nonlinear models namely, Smooth Transition Regression (STAR) and Nonlinear Autoregressive Distributed Lag (NARDL) approach. Studies on the relationship under examination have predominantly been confined in advanced economies. This study provides rigorous empirical evidence from the South African perspective.

PurposeThe authors investigate the growth–inequality relationship, using panel data from 13 Southern African Development Community (SADC) countries over the period 1990–2015, to test the validity of the Kuznets and Tribble theories. Furthermore, the authors seek to determine the threshold level at which excessive growth hampers inequality.Design/methodology/approachThe panel smooth transition regression (PSTR) model has several stages. The authors applied the Lagrange multiplier (LM) test to find the appropriate transition variable amongst all candidate variables, to assess the linearity between economic growth and income inequality and to find the sequence for selecting the order m of the transition function. The authors then estimated the PSTR model, but before facilitating the results, the authors first used the wild cluster bootstrap (WCB)–LM-type test to assess the appropriateness of the selected transition.FindingsThe authors found that at lower growth, income inequality tends to be lower, while if growth increases above US$8,969, inequality tends to increase in the SADC region. The findings combine into a U-shaped relationship, contradicting the Kuznets and Tribble theories.Originality/valueThe contribution of this paper is that it becomes the first to provide the threshold level at which excessive growth increases inequality in the selected countries. This study proposes that policymakers should focus on activities aimed at stimulating growth, in other words, activities such as spending more on infrastructure, drawing up a suitable investment portfolio and spending on technological investment for countries that are below US$8,969. An improvement in these activities will create job opportunities, which in turn will add to economic growth and thus lead to lower income inequality and better social cohesion.

This study employs panel data estimation models to investigate the determinants of household savings in South Africa over the period 2008 – 2012. The novelty of some panel data models is their power to overcome the problems of endogeneity bias, in addition to controlling for unobserved heterogeneity across households. The study used the three waves of the new unique and rich first national representative longitudinal survey, the National Income Dynamics Study (NIDS), which tracks changes in individuals’ livelihoods over time. The distinctiveness of NIDS data is that it is available in a panel format and can be used to investigate the structure and impact of different aspects of socio-economic factors on household savings. The results of this study reveal that household savings in South Africa are strongly driven by income, age structure, education achievement and employment status. Yet the causal nexus between savings and the household size was found to be negative, a sign that larger families compromise households savings prospects.

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.

In this paper the South African business cycle is modeled, using a simple linear method and comparing it to non-linear methods. This is useful to address the debate between the Classical and Keynesian economists regarding their views on the business cycle. They believe in a stable economy with exogenous shocks and an unstable economy with an endogenous business cycle respectively. Linear models are usually associated with the Classical view and non-linear models with the Keynesian view. A detailed discussion on the non-linear model-building process, with particular emphasis on the family of STAR models is done. The South African GDP is used and AR, TAR, LSTAR and ESTAR models are fitted and compared. It finds that a parameterized nonlinear model (such as the family of STAR models) outperforms the simple regression model. This is due to asymmetric behaviour in the GDP data and the possibility of a threshold between a recession and an expansion. The results in this paper support the structural or institutional view of business cycles, which states that economic fluctuations are caused by various structural or institutional changes.