Labour Market and Fiscal Policy Adjustments to Shocks: The Role and Implications for Price and Financial Stability in South Africa

ISBN-13: 9783319882628 / Angielski / Miękka / 2019 / 599 str.

Nombulelo Gumata; Eliphas Ndou

Spis treści

Part 1 Labour Market Characteristics and Monetary Policy

1: Introduction

2: Does the Beveridge Curve Exist in the South African Case, and What Are the Implications for Monetary Policy?

3: Does the Unemployment Invariance Hypothesis Hold in South Africa?

4: Does Price Stability Benefit from a Positive Shock in the Labour Force Participation Rate?

5: Is There an Inflation–GDP Growth–Employment Nexus in South Africa Within the 6 per cent Inflation Threshold?

Part 2 The Minimum Wage and Theoretical Predictions

6: Which Labour Market Structure Model Predictions Are Consistent with the Effects of a Minimum Wage on Inflation in South Africa?

7: The Minimum Wage, Income Inequality and the Price-Stability Mandate

8: The Efficiency Wage Hypothesis, Labour Productivity and the Minimum Wage

9: The Impact of the Minimum Wage on Capital-Labour Ratio Dynamics

Part 3 Labour Market Reforms and Price Stability

10: Labour Market Reforms and the Price Stability Mandate

11: Loosening in Collective Bargaining Impact on CPI and Inflation Expectations

12: Labour Market Reforms, Unit Labour Costs Shocks and Inflation Persistence

Part 4 Labour Market Conditions, Labour Productivity, Inflation Expectations and Monetary Policy

13: The Labour Market Conditions Channel in the Transmission of Positive Inflation and Inflation Expectation Shocks to the Repo Rate Reaction?

14: Real Interest Rate Shock, Labour Productivity and the 6 per cent Inflation Threshold

15: Capital Flow Surges and Sudden Stops Impact on the Sectorial Composition of Employment and Productivity Growth

16: Labour Productivity Growth and Inflation Expectations

Part 5 Labour Market Interactions with Selected Macroprudential Tools and Monetary Policy

17: Labour Market Conditions Shocks and Credit Growth

18: Weak Labour Productivity, Tight Credit Conditions and Monetary Policy

19: Labor Productivity and Labor Market Conditions Impact on Household Debt

20: Labour Market Reforms, Inflation Expectations and the Banks’ Required Reserves Channel

Part 6 The Interaction Between the Public–Private Sector Wages and Employment Growth 

21: Price Stability Impact on Wage Growth in the Public and Private Sectors

22: Public and Private Sector Employment and the Jobs Displacement Effects

23: Public-Sector Wages and Implications for the Budget Balance

24: The Economic Policy Uncertainty Channel and Employment Dynamics

Part 7 Nominal Wage Dynamics and Price Stability

25: The Inflation–Wage Spiral, Inflation Expectations and Monetary Policy

26: The 6 Per cent Inflation Threshold and the Transmission of Nominal Wage Shocks to Inflation Expectations

Part 8 The Fiscal Policy Taxation Channel

27: Do Government Debt Thresholds Impact the Transmission of Tax Shock Effects to GDP growth?

28: Fiscal Policy Variables Shock Impact on Inflation and GDP growth?

29: Income Tax Shocks and the Inflation-Output Volatility Trade-offs

30: Do Positive Tax Revenue Shocks Impact Financial and Credit Conditions?

31: Tax Revenue Shocks Effects on The Repo Rate and Inflation

Part 9 The Fiscal Policy Government Spending Cuts Channel

32: Does Government Spending Transmit Inflation to GDP growth?

33: Fiscal Spending Cut effects on CPI Inflation and Monetary Policy Cycles

Part 10 The Government Consumption Spending, Lending Spreads and the Cost of Borrowing Channels

34: Do Sovereign Yield Spreads Transmit Contractionary Fiscal Policy Shocks?

35: Fiscal Policy and Sovereign Spread Shocks: Risks and Policy Implications

36: How Potent Is the Output Channel of Borrowing Costs?

37: How Does a Positive Borrowing Costs Shock Impact Price Stability?

Part 11 Fiscal Policy, the Current Account and Transmission to Credit

38: Fiscal Policy Shocks and the Current Account

39: The Impact of Six Per cent Inflation on M3 and Credit on GDP

40: Does Inflation Neutralise the Multiplier Effects of Expansionary Monetary and Fiscal Policy on GDP Growth?

O autorze

Nombulelo Gumata is a part-time lecturer at the Centre for Education in Economics and Finance Africa. She is the co-author of Global Growth and Financial Spill-Overs and South African Economy and Bank Credit Extension and Real Economic Activity in South Africa: The Impact of Capital Flow Dynamics, Bank Regulation and Selected Macroprudential Tools.

Eliphas Ndou is an economist at the South African Reserve Bank and a lecturer at the University of the Witwatersrand, Johannesburg, South Africa. He is the co-author of Inflation Dynamics in South Africa: The Role of Thresholds, Exchange-rate Pass Through and Inflation Expectations on Policy Trade-offs and Monetary Policy and the Economy in South Africa.  

Blurb

This book focuses on the implications of the South African labour market dynamics including labour market reforms and fiscal policy for monetary policy and financial stability. Evidence suggests there are benefits in adopting an approach that coordinates labour market policies and reforms, fiscal policy, price and financial stability. In particular, the benefits of coordinating policies present policymakers with policy options in cases where they are confronted by binding policy trade-offs and dilemmas, such as in cases when there is divergence in price and financial and economic growth outcomes.

The empirical insights and policy recommendations are based on different techniques that include the counterfactual and endogenous-exogenous approaches, non-linearities introduced by thresholds and the impact of persistent and transitory shock effects. Themes covered in the book include various aspects of labour market conditions and reforms and their link to inflation and inflation expectations, the impact of the national minimum wage, the interaction between public and private sector wage inflation, economic policy uncertainty and employment, government debt thresholds, sovereign yields and debt ratings downgrades, labour productivity, the impact of inflation regimes on expansionary fiscal and monetary policy multipliers, the increase in government cost of funding on price and financial stability and the link between fiscal policy and credit dynamics.