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The South African Debt to GDP ratio is again set to surge following a R1 Billion loan from the World Bank. As per the 3r...
24/01/2022

The South African Debt to GDP ratio is again set to surge following a R1 Billion loan from the World Bank. As per the 3rd quarter of 2021, the net loan debt to GDP ratio set at 63.9% a whopping 226% growth from 19.8% in the 1st Quarter of 2009. ✈

28/10/2021

Milton Friedman in 1963

03/02/2021

Updated name to reflect the vision. Thanks for following.

30/12/2019

The behavioral factors are slowly eroding the power of economic policy globally. The power of human sentiments, expectations, preferences, moods, and pulse have become more reflected in markets. This is slowly making it hard for economic policies to make significant impact into aggregate economic activity. The much said monetary and fiscal policies have become less and less significant in informing economic activities. While this can not be blamed to only behavioral factors, behavioral factors have played a bigger role into this. This leaves economists with a major challenge going ahead into the next decade. How will economic activity be informed going forward? This calls for models which constitute the behavioral factors, technological factors, economic factors, and political factors. The bigger challenge will be to come up with behavioral indices and or variables that can be quantified and tracked so as to harness the behavioral factors into the fold of economic policy. One may argue that it is economic policy that informs behavior but that has since changed. People as economic agents have become impatient, pulse driven, fast, and complicated. This jeopardizes the whole economic policy especially given the relatively faster resource mobility between countries and the evolution of technologies that makes it easy to channel funds into alternative assets in which so ever country economic agents may want. Its gonna be a challenging decade for economists! 🤣

21/06/2019

Central bank independence may be defined as the ability of the central bank to act independent from the government. It enables the central bank to determine policy goals and policy instruments with a high degree of autonomy.Some theorists have argued that though some of the countries may have some what independent central banks, it remains the issue of a degree. So how does a central bank gain independence? What are the advantages of central bank independence? Are there any drawbacks of central bank independence?

If a given central bank could have a few number of politicians among its board of directors and staff it is considered to be highly independent.A highly independent central bank has its governor appointed by the central bank board rather than a minister or a politician. A highly independent central bank has a governor who has their tenure longer than a sitting government.The contract of the governor in a more independent central bank is not subject to renewal.Other theorists also argue that in a more independent central bank, there is a limited ability of the government to borrow from the central bank.These are some of the conditions to be met if we are to have our central banks independent.So why should we have central banks independent especially in Africa?

Independent central banks are capable of insulating the economy from political business cycle by limiting the ability of the government to do pre-election monetary policy manipulation. This is key because it allows for policy consistence which in the long run may instill confidence on investors thus translating to increased foreign direct investments.Long run economic growth requires price stability, this may not be possible especially if the financial markets are not developed and the central bank is not independent.Independent central banks are little to increase better governance of the central banks by allowing for the the central bank board to choose governors rather than a politician.Highly independent central banks are concerned with the long run macroeconomic outcomes yet a less independent central bank is highly little to have short term macroeconomic policies that have serious long run consequences.

While independent central banks may lead to stability in the financial markets by giving central banks the autonomy to act independent and more so, by limiting the government s involvement in the financial markets, it may potentially lead to incompatibility of the fiscal and the monetary policy.Fiscal policy and monetary policies should work hand in hand but under central bank independence, this may be compromised.An independent central bank may be concerned with price stability and embark on a contractional monetary policy yet the fiscal authorities may be aimed at improved growth and embark on expansionary fiscal policy which may lead to undesired outcomes of both policies

So what is the answer then?Should we opt for the independent central banks? Lets borrow from the countries with high degree central bank independence. The United States of America is ranked among the top countries with high degree of central bank independence. This has not only allowed a much stable dollar, but on average, a more stable economy. Although this may not be totally attributed to only central bank independence, central bank independence is among the reasons why it is so..

04/01/2019

Traditional school of thought always superimpose IQ as the only determinant of success but however latest classical research findings have opposed such view, and to the contrary concluded that Success is determined by the amount of effort applied. On the transpose, failure is inevitable with less and less effort applied to a cause.This learned, it becomes clear that no matter how big a dream is, it will be a nightmare without effort. Therefore, there is positive correlation between success and effort.

The family has been so great to me
27/07/2018

The family has been so great to me

22/10/2017

The economics of money is so rude such that even if you chase money changers on the streets you still havnt dealt with Gresham 's law just yet

18/03/2017

Trickle down economics the axiom that if you throw enough money at the top everyone wld benefit has never worked starting a quater of century ago.The belief has only benefited the few top located individuals at the expense of those in the lower achelons a phenomena which has exacerbated inequality

13/09/2016

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