Newsletter of Department of Economics 2018 1 - First Quarter 2018

11 April 2018
This newsletter covers activities and achievements of the Department of Economics, University of Pretoria

Message from the HOD

Message from the HOD
Prof Steve Koch HOD

Overview of the Department of Economics

It is my privilege to provide you with a few highlights about the Department of Economics at the University of Pretoria. Over the past number of years, we have become one of the top research departments in the university. We have also continued to make our mark in economics, internationally, being listed amongst the top 6% of such departments around the world. In my view, the Department of Economics at the University of Pretoria continues to punch well above its weight class, especially with respect to research productivity.

To take advantage of this research success, and, more importantly, to encourage future student cohorts to consider economics, we have begun to develop closer interdisciplinary ties to the faculties of Engineering and the Built Environment, Health Sciences, Humanities, Law, and Natural and Agricultural Sciences. As part of that engagement, UP recently started a program in philosophy, politics and economics. Similarly, we are beginning to see more students from other programs take on postgraduate degrees in Economics.

Academic staff members in the department have also been developing ties to local business and government. Economic consultants are engaging with students, both in the classroom and outside, to give them a better idea of how economics can be applied in the high-intensity consulting sector. Economic policy analysists and policymakers are also engaging with our students. Such engagement has led to the development of short internship programs for some of our postgraduate students, and we remain interested in developing more such programs. Thus, if you are interested, please, feel free to engage with me.

- Author: Prof Koch

Research Highlights

Research highlights for 2017
Department of Economics Tukkiewerf

Record research outputs for 2017

Over the past few years there have been approximately 25 academics in the Department of Economics and the African Tax Institute. This makes the number of outputs that have been growing steadily very impressive. Research output in 2017 was a record of 155 different publications associated with the department of economics, including, articles, books and chapters in books. Over the past five years, article units, which is the way research output is measured by the Department of Higher Education and Training has increased 72%!!

 

Department of Economics journal articles in accredited journals

 

Year

No of articles

No of units

1

2013

52

33.25

2

2014

61

41.10

3

2015

103

59.53

4

2016

91

54.23

5

2017

120

57.17 (provisional)

 

- Author: Prof Koch

Top researcher

Department of Economics' top researcher
Prof Rangan Gupta

Prof Rangan Gupta is a renowned researcher

Prof Rangan Gupta, the top researcher in the Department, highlighted one of his articles published in Empirical Economics.

Balcilar, M., Gupta, R., and Kotze, K. (2017). Forecasting South African Macroeconomic Variables with a Markov-Switching Small Open-Economy Dynamic Stochastic General Equilibrium Model. Empirical Economics, Special Issue: Forecasting, Use of Survey Data on Expectations, and Panel Data Applications, 53(1), 117-135.

This paper seeks to identify evidence of regime-switching behaviour in the monetary policy response function and the variance of the shocks. It makes use of various specifications of a small open-economy Markov-switching dynamic stochastic general equilibrium model that is applied to South African data for the quarterly period of 1989 to 2014. While the in-sample statistics suggest that some of the regime-switching models may provide superior results, the out-of-sample statistics suggest that the inclusion of various forms of regime-switching does not significantly improve upon the forecasting performance of the model. The results also suggest that the central bank response function has been consistently applied over the sample period.

This, first of its kind model developed for South Africa, makes two important contributions. As outlined above, it reminds us that in-sample and out-of-sample model behaviour can be quite different; thus, it is important not to rely on standard measures of model fit. Similarly, the paper confirms that the SARB is consistent in its behaviour. In addition, this paper appears in a special issue in the honour of well-known econometrician, Professor Kajal Lahiri, and is also based on a personal invitation received from the editor of Empirical Economics, Professor Badi H. Baltagi, a very well-renowned econometrician himself. 

- Author: Prof Gupta

Graduate achievement

Dr Nicky Nicholls best PhD in Economics
Dr Nicky Nicholls

Dr Nicky Nicholls won the award for the top Economics PhD in South Africa

Dr Nicky Nicholls, a Senior Lecturer in the Department of Economics, was awarded the PhD Founders’ Medal by the Economic Society of South Africa (ESSA) in 2017 for the top economics PhD thesis in the country.

The thesis investigated violations of rationality assumptions in decision making under uncertainty. Dr Nicholls conducted a series of experiments to elucidate the impact of information on rationality violations in individual decision making, and on strategic interactions in the possible presence of group identity biases. Improved understanding of how individuals make decisions under uncertainty (either in isolation or in interaction with others) has important implications for economic modelling, since assumptions about the way individuals and households make decisions underpins nearly all of economics, marketing and management, as well as many other areas of life.

The Founders' Medals were instituted to commemorate the work of Professor HES Freemantle, Professor RA Lehfeldt and Mr CW Pearsall, through whose efforts the Economic Society of South Africa was founded in 1925. The purpose of the award is to encourage research in the field of economics in South Africa and recognise economic research of outstanding quality conducted at a South African university.

- Author: Prof Koch

Academic research project

Academic research project – behavioral economics
Dr Carolyn Chisadza participated in the research project

Research related to behavioral economics evaluating students' perceptions

Drs Carolyn Chisadza, Eleni Yitbarek, and Nicky Nicholls have been investigating bias in student assessments of lecturers. Bias against female lecturers is noted in previous studies, mostly in the Developed World.  On the other hand, race has received limited attention in the literature.  With the objective of filling this void in the empirical evidence, they conducted an experiment with a class of 1,599 first-year students to see whether different lecturers are evaluated differently while giving the same quality of lecture.   To do this, they had four identical video lectures (in the form of narrated slides) using identical slides and an identical script but with different lecturers.  There were four different versions of the video, where only the lecturer's race and gender were varied. Videos showed a lecturer who was either Black Male, Black Female, White Male or White Female.  Students were randomly assigned to see one of the four videos as part of a revision exercise. After seeing the video and answering a short quiz, students assessed the lecturer and quality of the video (the lecture) on various dimensions. Differences in students' assessments of the overall quality of the lecture (when the only difference between lectures was the race and/or gender of the lecturer) were interpreted as indicative of race/gender bias. Preliminary findings suggest that male and black lecturers received lower ratings from students. Of concern, these biased ratings were noted across students' race and gender.

- Author: Dr Nicholls

SARB Chair

The SARB Chair in Monetary Policy Studies
Prof Nicola Viegi Director of the SARB chair

The SARB Chair in Monetary Policy Studies Helping Policy Now and Training the Policy Makers of Tomorrow

The SARB Chair in Monetary Policy Studies’s vision is: Helping Policy Now and Training the Policy Makers of Tomorrow

In collaboration with the South African Reserve Bank, the Chair has planned four research workshops for this year. In February, Maria Demertzis, deputy director at Bruegel, one of the most important think thanks in Europe, opened a workshop on “Resilience”. The workshop discussed options for making policy and the economy robust to the uncertainty, from national and international events, that South Africa experiences.

In May, Matteo Maggiori from Harvard University, is opening a workshop on exchange rate determination and control, one of the recurrent themes in South African policy debates. In the second part of the year further workshops are planned on South African inflation determination and forecasting macroeconomic variables in South Africa.

The Chair has recruited recent graduates from all over the world as Post-Doctoral fellows, to form the backbone of the Chair’s research capacity. The combination of high-level research and policy engagement is a unique characteristic of the Chair’s functions and is clearly appealing to young scholars interested in policy-relevant research.

The Chair is also promoting an internship program for graduate students at the SARB and other policy institutions, to more closely connect our learning programs with the questions arising from the policy process. Two recent graduates, Tumisang Loate and Vincent Dadam, have gained experience working at the SARB and the IMF; they have also been appointed as post-doctoral fellows.

The Chair’s overall goal is to use the expanded resources to become the point of reference for graduate research and learning activities in macroeconomic policy studies, to increase the interaction between academia and policy-making and to promote an academic culture of rigorous policy engagement.

- Author: Prof Viegi

Visitors to the Department

Visitors to the Department
Prof Maria Demertzis, Bruegel

Renowned visitors to the Department

From January to March a number of international visitors spent time in the Department sharing their research in various fields.  These included Maria Demertzis, Deputy Director at Bruegel, the Brussels based economic think tank; Philipp Öhlmann of the Humboldt-Universität zu Berlin; Dr Jesse Naidoo of the University of Chicago; Prof Frank Riedel of the Bielefeld University; and Dr Paolo Belli of the World Bank.

- Author: Prof Koch

Alumni achievement

Dr Mampho Modise DDG Public Finance
Dr Modise, National Treasury

Dr Modise has been appointed as Chief Director for Strategy and Risk Management, National Treasury

The Department is very proud of the achievement of Dr Mampho Modise who completed her tertiary training at the University of Pretoria, obtaining her Bcom Economics, BCom Honours Econometrics, Mcom Econometrics (cum laude) and a PhD in Economics (under the supervision of Prof Rangan Gupta).

She worked for the South African Reserve Bank from 2004-2009, where she was an intern and progressed to be an economist.

At present, Dr Modise is Chief Director for Strategy and Risk Management in Asset and Liability Management, where she deals with policy issues and the development and implementation of a Strategy and Risk Management Framework to monitor and manage public sector liability portfolios. In addition, she manages the South African government’s relations with global rating agencies

(National Treasury official newsletter, Issue 4, 2017)

- Author: Prof Koch

Graduate pursuits

Two master’s students’ semester in Göttingen
Charl van Schoor and Lelani Coetzee

Two master’s students’ completed a semester at the Georg-August Universität Göttingen

Two master's students Charl van Schoor and Lelani Coetzee completed a semester at the Georg-August Universität Göttingen, a well-known international university, where almost a sixth of all the students are international students. The number of courses to choose from and the ease with which various departments collaborate presented the opportunity to take very interesting cross disciplinary modules. It was enriching and challenging to study subjects that were very different from the modules they had previously taken. The knowledge they acquired during the semester greatly supplemented their existing knowledge and highlighted the importance that economics plays in many other fields. It was also a privilege to learn from lecturers that work for the UN, World Bank and EBA. This opportunity has changed the course of their lives, and they are both very grateful to the University of Pretoria and the Georg-August University for making it possible.

- Author: Van Schoor and Coetzee