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Forecasting economic downturns in South Africa using leading indicators and machine learning
Full text linkWe identify South African business cycles using the algorithm of Bry-Boschan and show that the identified turning points are very similar to those from other approaches. We demonstrate that South Africa has a very volatile business cycle that makes it particularly difficult to predict turning points in the economic cycle. South Africa’s business cycle is characterised by relatively long downswings and short upswing phases with low amplitude. We find that the South African Reserve Bank (SARB)’s Leading Indicator does not substantive improve predictions of the business cycle relative to GDP itself. We assess the performance of a range of potential leading indicators in identifying economic downturns and consider whether alternative indicators and estimation approaches can
produce better predictions than those of the SARB. We demonstrate that using a larger information set produces substantially better business cycle predictions, especially when using machine learning techniques. Our findings have implications for the creation of
composite leading indicators, with our results suggesting that many of the macroeconomic variables considered by analysts as leading indicators do not provide good signals of GDP growth or developments in the South African business cycle
Economic causation nexus and the minerals industry
Full text linkThis paper analyses the causality nexus between the minerals industry and selected macroeconomic indicators in South Africa. This is achieved by augmenting a Taylor1993 rule type central bank monetary policy reaction function with selected macroeconomic indicators and comparing the causality between the minerals industry and these macroeconomic indicators. The results provide evidence of a statistically significant unidirectional causality from commodity prices, foreign exchange rate and geopolitical risk to output of the minerals industry. The results have also shown a unidirectional causality from output of the minerals industry and government expenditure, or fiscal policy stance. The results further show a bidirectional causality between output of the minerals industry and monetary policy interest rate, foreign direct investment, financial market, business confidence, market uncertainty as well as external, or foreign, demand. The results, however, do not show the absence of causality, or causation, between output of the minerals industry and the selected macroeconomic indicators. Macroeconomic indicators are important for economic activity, hence policymakers should monitor developments in macroeconomic events to support economic growth as well as the minerals industry
Penalized Convex Estimation in Dynamic Location-Scale models
Full text linkThis paper introduces a two‑step convex estimator for dynamic location–scale models. Step 1 relies on a -consistent preliminary estimator. Step 2 minimizes an adaptive ‑penalized weighted least squares (WLS) criterion, yielding a sparse estimator. The objective is convex, avoiding the local‑optima issues of non‑convex optimizations. Consistency, asymptotic distribution, and model‑selection consistency are proven. Simulations confirm finite‑sample performance. A financial data set illustrates practical utility
The Rising Returns to R&D: Ideas are not getting harder to find
Full text linkR&D investment has grown robustly, yet aggregate productivity growth has stagnated. Is this because “ideas are getting harder to find”? This paper uses micro-data from the US Census Bureau to explore the relationship between R&D and productivity in the manufacturing sector from 1976 to 2018. We find that both the elasticity of output (TFP) with respect to R&D and the marginal returns to R&D have risen sharply. Exploring factors affecting returns, we conclude that R&D obsolescence rates must have risen. Using a novel estimation approach, we find consistent evidence of sharply rising technological rivalry. These findings suggest that R&D has become more effective at finding productivity-enhancing ideas but these ideas may also render rivals’ technologies obsolete, making innovations more transient
The approach for Abu Dhabi’s solar energy: Centralised or Decentralised
Full text linkThis paper evaluates the economic viability of decentralised solar systems in Abu Dhabi. By analysing levelised cost of electricity (LCOE), net present value (NPV), and internal rate of return (IRR) across customer groups, it finds that while rooftop solar generation is not yet cost-effective for heavily subsidised sectors, it remains viable for industrial and commercial users. The study suggests that subsidy reform could significantly improve the financial appeal of decentralised systems, aligning with Abu Dhabi’s decarbonisation targets under the UAE Energy Strategy 2050
The Food Safety Level in the European Union Underpinned by the Performance of the Private Companies
No full textBackground: Monitoring food safety in the supply chain has been one of the priorities of European consumer protection policies. In this context, during the last two decades, an important increase in notifications to the RASFF by private companies has occurred. Objectives: This study provides new insights by demonstrating that the implementation of private standards like GlobalGAP is not only linked to increased notifications, but also to a reduction in food safety issues when certifications are widespread. Approach: Thus, the effect of improvements in actions taken by companies, concretely applying the Global GAP protocol, on the number of notifications reported to the RASFF has been quantitatively measured through a multivariate analysis based on a panel of data from 18 European countries. Results: The results highlight that while private standards improve detection, they also reduce the risks, and that management made by producers, trading companies, and retail businesses are indeed highly relevant for the effectiveness of the RASFF as well as that enterprises have become a leading actor in maintaining food harmlessness. Conclusions: These findings underscore the importance of integrating private initiatives into public food safety policies. Specifically, the European Administration should incentivize certification adoption and enhance public-private collaboration to maximize food safety outcomes
Study on National Industrialization Co. In Saudi Arabia: Operational Efficiency and Its Determinants from 2013 to 2023
Full text linkThis study is an analysis that attempts to investigate the determinants of operation efficiency throughout the context of National Industrialization Co. Analysing the impact of internal, external, and combined variables of National Industrialization Co. are the aim of this research project. The annual reports from 2013 to 2023 are examined as part of the research. The raw data for this investigation were analysed using a multiple linear regression model. Throughout this study, a results indicate that the four of all internal and external variables have a significant effect on the company's operation efficiency, which are Return on Equity (ROE), Cash Ratio (Cash), and Foreign Direct Investment (FDI). Additionally, the study provides valuable insights into the company's risk management practices, offering recommendations to enhance risk mitigation strategies, thereby ensuring the company's long-term financial stability and regulatory compliance
The complementarity of low taxes and pro-social guidelines when polluters have moral preferences
Full text linkWe present the results of a series of public-bad laboratory experiments in which we assess whether a salient message suggesting pro-social behavior with an implicit moral appeal, and a tax that is insufficient to induce the optimal level of the externality, can complement each other when implemented jointly. Our results suggest that, on average, (a) behavior is consistent with subjects having moral preferences, (b) a salient message suggesting pro-social behavior can be effective, (c) preferences are non-separable from the choice of instrument (i.e, the tax crowds-out part of the subjects´ moral preferences), and crucially, (d) the tax and the informative message do not complement each other. The tax has a greater impact on reducing the externality than the prosocial guideline, even though the tax was only half of that needed to reach the socially optimal level. Nevertheless, when implemented together, the total effect of both instruments is similar to that of the tax alone. This result is stronger for those subjects that are more “nudgeable” by the prosocial guideline. These results challenge the policy recommendation that nudges can effectively complement low taxes while awaiting the political will to raise them
Inequality Reduction in Mongolia: A Dynamic Income Source Analysis
Full text linkBetween 2007 and 2022, Mongolia’s Gini coefficient decreased by 26 percent. Structural economic shifts, labor market changes, and evolving income composition drive this reduction. Using dynamic income source decomposition on household survey data, this study finds that reduced shares and concentration of imputed housing consumption and self-employment income were the main equalizing forces. In contrast, rising wage shares exerted upward pressure on inequality despite declining wage concentration. The expansion of employment in the mining, trade, and finance sectors, along with broad coverage of social welfare programs, especially child benefits, played a significant role. Pandemic-era transfers amplified the effect of the social transfers. However, gender wage gaps, regional disparities, and vulnerability of herder households persist. The results underscore the importance of targeted labor market policies, improved social transfer design, and resilience measures for rural livelihoods in resource-dependent developing economies
Nominal rigidities equilibria in a non-Ricardian economy
Full text linkThis paper examines the macroeconomic implications of nominal rigidities in a non-Ricardian economy, where households face borrowing constraints and do not fully internalize the government’s intertemporal budget constraint. Departing from the Ricardian equivalence framework, we show that fiscal policy plays a central role in shaping aggregate demand when nominal wages or prices adjust sluggishly. The interaction between sticky prices, liquidity-constrained households, and active fiscal policy generates non-neutral effects of government spending and taxation, amplifying short-run fluctuations. Using a simplified dynamic model, we demonstrate how nominal rigidities magnify fiscal multipliers and alter the transmission of monetary policy, particularly under conditions of limited asset market participation. These findings highlight the importance of accounting for both non-Ricardian behavior and nominal stickiness when evaluating stabilization policy in economies with incomplete financial markets