Volumen 65 (2020): Heft 1 (April 2020)

This paper explores the causality between public debt, public debt service and economic growth in South Africa covering the period 1970 – 2017. The study employs the autoregressive distributed lag (ARDL) bounds testing approach to cointegration and the multivariate Granger-causality test. The empirical results indicate that there is unidirectional causality from economic growth to public debt, but only in the short run. However, the study fails to establish any causality between public debt service and economic growth, both in the short run and long run. In line with the empirical evidence, the study concludes that it is economic growth that drives public debt in South Africa, and that the causal relationship between public debt and economic growth is sensitive to the timeframe considered. The paper recommends policymakers in South Africa to consider growth-enhancing policies in the short run, since poor economic performances may lead to high public debt levels.

It is widely argued that public debt is a burden on the future generations. We analyze another aspect of public debt as an economic stimulus program, that is, the measure to realize full employment from an under-employment state. Using a continuous time version of a dynamic analysis of debt-to-GDP ratio we show that a fiscal policy to realize full employment from a state of under-employment can reduce the debt-to-GDP ratio. More precisely we show that the larger the extra growth rate (increasing rate) of real GDP by a fiscal policy is, the smaller the debt-to-GDP ratio at the time when full employment is realized is. Also we show that even if the marginal propensity to consume is very small (including zero), an aggressive fiscal policy can realize full employment without increasing the debt-to-GDP ratio. Further, we consider a condition to realize full employment from a state of under-employment within one year without increasing debt-to-GDP ratio.

It has become precise and indisputable that the South African economic growth has been stagnant. Despite this stagnant growth, the productivity of key sectors is supposed to alleviate some of the challenges of the South African economy. The aim of this study is to identify the key sectors that may assist in boosting economic growth at a local level. This study employed three estimators (PMG, MG and DFE) of a panel autoregressive distributed lag model (ARDL) to analyse the short- and long-run effects of various sectors’ productivity on economic growth in a South African district. By employing annual data from 1996 to 2015, 6 sectors (construction, finance, trade, community service, manufacturing, transport, mining and tourism) from four municipalities in South Africa were analysed. Results show that the productivity of the construction, transport, trade, manufacturing and finance sectors influence economic growth positively in the long-run. However, the productivity of the mining and tourism sectors negatively affect economic growth in the long-run. Short-run results reveal that, in the short-run, the productivity of all sectors, except trade and transport, contribute positively to local economic growth. This study recommends that the government improves the production methods and invests in infrastructure and skills development to advance the productivity of the mining and tourism sectors.

Selecting online the most suitable product or service can be a draining process, and the broad diversity of products on retailers’ websites is overwhelming. Following this, there has been a high interest in examining buyers’ motivations and recognizing the determinant factors that affect the decision-making process in the case of online shopping. Hence, in this article, we carried out an empirical study and we analyzed to what extent certain factors such as product features, confidence in the online shop, product reviews, product price, consumer evaluations, the trust of the sources, usability of the online shop, convictions and commitment to the brand, product notoriety, consumer loyalty programs, WOM, and eWOM influence the purchasing decision. The findings reveal that the most significant variables determining the acquisition decision are product features, confidence in the online shop, reviews of the product, product price, and evaluations of customers from trusted sources. The most relevant information resources are trustworthy websites that offer specialized product reviews and reliable websites that offer customer product reviews.

The study investigates the nexus between military expenditure and macroeconomic performance in Nigeria between 1980 and 2017. Data on military expenditure and some macroeconomic variables such as output (GDP), exchange rate and inflation rate are used in the study. The Vector Auto-regression technique VAR is applied so as to study the interactions among the variables in the short run. The result shows that military expenditure in Nigeria is significantly influenced by output and exchange rate shocks. It was also revealed that military expenditure does not make significant contributions to the behaviour of output in Nigeria. Military expenditure appears to be insulated against inflation shock since the largest chunk of military expenditure is traded in foreign currency hence less affected by domestic prices.