Nyemwererai Matshaka, a PhD student in the Department of Economics in the Faculty of Economic and Management Sciences at the University of Pretoria, won the Econometric Society, Africa Region's Young Economist Best Paper Award at the Africa Meeting of the Econometric Society. The conference, hosted by the African Economic Research Consortium, took place in Nairobi from 1 to 3 June 2023 and brought together leading economists and researchers from across Africa.

The award-winning paper, titled ‘Inequality in a two-agent, variety extension growth model’, emanates from Matshaka's PhD research, which focuses on macroeconomic policy in an unequal society. Her PhD research, under the supervision of Profs Yoseph Getachew and Nicola Viegi, both from the Department of Economics, studies the relationship between innovation, inequality, and economic growth within the context of the South African economy.

According to Matshaka, her work addresses one of the most pressing challenges currently faced by the South African economy, such as stagnant economic growth and a high level of inequality. In an effort to address these, she developed a two-agent heterogeneous model that considers the role of capitalists and workers. By calibrating the model specifically for the South African context, she sheds light on the implications of research and development (R&D) productivity, taxes, and R&D subsidies on economic growth and inequality.

Her findings reveal that increased R&D productivity primarily reduces inequality by enhancing workers' productivity. However, the implications of taxes and R&D subsidies on economic growth and inequality are not straightforward. Capital taxes discourage economic growth, while R&D subsidies promote it. In terms of inequality, capital taxes have a less favourable impact, while labour taxes and R&D subsidies contribute to its reduction. These results underscore the importance of considering heterogeneity when designing policies aimed at fostering economic growth.

The Econometric Society, Africa Region's Young Economist Best Paper Award includes a prize of $500 and publication assistance in a specified journal. Matshaka’s accomplishment highlights her outstanding research contributions to the field of economics and holds great promise for her future career as an aspirant development economist. She expressed that the recognition was a great honour for her, knowing that other economic researchers found her research impressive and valuable.

Matshaka's research not only addresses the challenges facing the South African economy, but also contributes to the broader understanding of macroeconomic policy in an unequal society. Her work serves as a beacon of hope for policymakers and researchers striving to create more inclusive and sustainable economic systems in Africa and beyond.

Reflecting on the conference, Matshaka highlighted the value it added to her studies and prospective research career. “The conference was a wonderful experience that was both academically and professionally enriching. It enabled the exchange of ideas and provided a platform for meaningful feedback. It was an opportunity to interact with fellow PhD candidates, recent graduates, and seasoned economic researchers. These engagements have built potential professional networks and taught me more about life after the PhD,” she said.