A disaggregated Marshallian macroeconometric model of South Africa

Abstract

The thesis enticingly describes a synergetic mix of productivity related topics at macroeconomic level. It aims at whetting potential readers to understand in more insightful ways topics such as: (1) the use of human capital in sectoral growth; (2) the role played by rising public expenditures (health and education) in strengthening production activities; (3) the role played by disaggregation in improving models’ forecasting ability and policy guidance; etc. The current research constitutes a valuable tool for understanding and predicting a country’s overall economic behavior and the behavior of important industrial sectors. In the present study, lack of data on important variables at sectoral level led to the use of advanced econometric estimation methods such as the implied transfer function equations system. As cited in the thesis, the literature reports a set of interesting economic investigations in this field that have been successful in describing some of the features included in this study. However, this research not only enhances the theoretical discussion on the issue but also provides empirical evidence using South African data. It is anticipated that further use and development of the outcomes of this thesis will yield additional explanatory, predictive and policy-making results that will be useful to many. In addition to the usefulness of this thesis’ contribution to the body of knowledge, several suggestions for further improvement are considered. Most predominantly, the work presented in this thesis has been reported in two interrelated papers (chapters). In the first paper, a methodical discussion is provided on the use and the size of social ingredients estimated as the level of normalized human capital per capita together with the conditional convergence process applied to South African sectoral growth. In the second paper, the parameters obtained are embodied into a full-fledged Macroeconometric (Marshallian) Model employing South African economic sectors. In fact, the second paper goes beyond the simple discussion of a Disaggregated Macroeconometric Model. It provides a comprehensive analysis of the effects that freedom (Thatcher-like) reforms may induce to the South African economy.