Analysing the impact of wage rate and inflation on labour productivity among selected early inflation-targeting countries and emerging market economies
| dc.contributor.advisor | Prof Kaseeram, I. and Dr Makhoba, B.P. | |
| dc.contributor.author | Mthethwa, Mzweleni Fundani | |
| dc.date.accessioned | 2024-07-11T12:56:35Z | |
| dc.date.available | 2024-07-11T12:56:35Z | |
| dc.date.issued | 2023 | |
| dc.description | A dissertation submitted to the Faculty of Commerce, Administration and Law in fulfilment of the requirements for the Degree of Master of Commerce in the Department of Economics at the University of Zululand, South Africa [2023]. | |
| dc.description.abstract | The emerging market economies (EMEs) have experienced more severe trade-offs, higher output and inflation volatility, and poorer performance than developed economies, economic diversity necessitates special efforts. However, the inflation targeting (IT) has been used by central banks as the tool to maintain price stability, but what remains as a major issue is the positive relationship between increased wage rate and labour productivity, which then increases the inflationary pressure in a case of IT EMEs as compared to early IT countries. Theories based on prior experiences around the world have led to generalisations of some monetary policies that ignore differences between countries. In a labour market with perfect competition, wage rates are determined by labour productivity, and wage dispersion represents the marginal contributions of the different workers to the final product. Therefore, this study analysed the impact of labour productivity on wage rate and inflation among selected early IT countries and EMEs over the period 1990-2019. It was a quantitative study, anchored on IT adopters’ countries design because there was strong evidence of a structural break before 1990, which led to a rose rapidly of inflationary pressure and subsequently fed through into per worker wages and productivity negatively. The study employed a panel autoregressive distributed lag approach (PARDL) to analyse the long-run relationships and short-run dynamics between wage rate and labour productivity. Labour productivity was treated as an endogenous variable in the model, while explanatory variables include wage rate, inflation, import and export ratio. The study provided strong evidence of a significant positive impact of wage rate, inflation, import and export ratio on labour productivity for both early IT countries and EMEs. The study found that there was positive and significant long-run relationship between wage rate and labour productivity. Also, there was a positive short-run relationship highlighting the dual effects of wage rate on labour productivity in early IT countries and EMEs, positively significant at 1% and 10%. Moreover, there was positive and significant relationship between inflation rate and labour productivity, which was contrary to related studies for both early IT countries and EMEs. The most plausible explanations for these results are that the adoption of IT had a positive impact on labour productivity shock that led to a significant decline in consumer price inflation and inflation expectations for early inflation targeters. However, that was contrary for IT EMEs as compared with early IT as positive labour productivity shock in IT EMEs led to a significant increase on the inflation pressure. The results of this study have important policy implications for policy makers in EMEs and contribute to the notion that the causes of inflation in EMEs are multi-dimensional and dynamic. Thus, policy makers in EMEs need to be able to offer solutions to the inflationary trends that lead to high productivity, also decreased unemployment, and an improvement in living standards. | |
| dc.description.abstract | ISIFINGQO Amazwe eminotho esathuthuka (EMEs) ibhekene nokuhwebelana okubi kakhulu, imikhiqizo ephezulu, ukuntengantenga kwamandla emali kanye nesimo esibi kwezomnotho uma kuqhathaniswa namazwe athuthukile, Ukwehlukahlukana kwezomnotho kudinga ukusebenzisa ubuchule obukhethekile. Kodwa- ke ekugxileni kokwehla kwamandla emali (Inflation Targeting) kusetshenziswe amabhange amakhulu njengethuluzi lokugcina ukuqina kwentengo kusesimeni esifanele, okuyiphuzu elikhulu ubuhlobo obuhle phakathi kokukhuphuka kwezinga lamaholo kanye namandla abasebenzi okukhiqiza, okubuye kwandise ingcindezi yokwehla kwamandla emali emazweni athuthukayo uma kuqhathaniswa namazwe akuqala kuqala ukusebenzisa i- IT. Imigomo nemicabango esuselwa ezimweni nezigameko zangaphambili kuholele ekwakhiweni kwezinqubomgomo ezithile zezimali ezinganaki umehluko phakathi kwamazwe. Ezimakethe zezabasebenzi ezinokuncintisana okuphelele, amanani amaholo aqunywa izinga lemikhiqizo yabasebenzi. Kanti ukwahluka kwamaholo phakathi kwabasebenzi kuhambisana namagalelo abo emkhiqizweni wokugcina. Ngakho-ke, lolu cwaningo luhlaziye umthelela wokukhiqiza kwezabasebenzi esimweni samaholo ahambisana namagalelo abasebenzi ngokwahlukana, kanye nokwehla kwamandla emali phakathi kwamazwe aqala kuqala ukusebenzisa i- IT akhethiwe kanye nama- EME esikhathini esisukela kowe-1990 kuya kowezi-2019, Bengucwaningo olusezingeni eliphezulu, olugxile ekwakhiweni kwamazwe amukela i- IT ngoba benobufakazi obuqinile bokwehlukana kwesakhiwo ngaphambi kowe- 1990, okwaholela ekwenyukeni ngokushesha kwengcindezi yokwehla kwamandla emali futhi okwalandela ngemiholo yabasebenzi kwaholela nasemikhiqizweni engagculisi ngenxa yokwehla kwamandla emiholo okwenza kwehle namazinga okukhiqiza . Ucwaningo lusebenzise indlela yephaneli ye-autoregressive distributed lag approach (PARDL) ukuze kuhlaziywe ubudlelwano besikhathi phakathi kwezinga lamaholo kanye nalokho okukhiqizwa abasebenzi. Ukukhiqiza kwezabasebenzi kuthathwe njengokuguquguquka okungapheli kule modeli, kuyilapho okuguquguqukayo okuchazayo kuhlanganisa isilinganiso samaholo, ukwehla kwamandla emali, isilinganiso sokungenisa nokuthumela ngaphandle kwempahla yokuhwebelana. Ucwaningo luthole ukuthi kunobudlelwano obuhle nobubalukekile besikhathi eside phakathi kwezinga lamaholo kanye nokukhiqizwa abasebenzi futhi kube nobudlelwano obuhle besikhathi esifushane obugqamisa imiphumela embaxambili yezinga lamaholo ekukhiqizeni kwezabasebenzi emazweni aqala kuqala esebenzisa i- IT kanye ne- EME, kusukela phakathi ku-1% kuya ku-10%. Ngaphezu kwalokho, kube nobudlelwano obuhle nobubalulekile phakathi kwezinga lokwehla kwamandla emali kanye nalokho okukhiqizwa abasebenzi, obekuphambene nezifundo ezihlobene nawo womabili amazwe okuqala e- IT kanye nama- EME. Izincazelo ezizwakalayo zale miphumela, ukwamukelwa kwe-IT kube nomthelela omuhle ekunyuseni izinga lokukhiqiza kwabasebenzi okuholele ekwehleni okukhulu kwentengo yezinto ezibalulekile kumthengi kanye nokulindela kokwehla kwamandla emali kwabahlosile ukuthi kwehle amandla emali ngaphambi kwesikhathi. Kodwa-ke, lokho bekuphambene ne-IT EMEs uma kuqhathaniswa ne-IT yasekuqaleni njengokushaqeka kokukhiqiza okuhle kwabasebenzi kuma-IT, EME kwaholela ekunyukeni okukhulu kwengcindezi yokwehla kwamandla emali. Imiphumela yalolu cwaningo inemithelela ebalulekile yenqubomgomo kubenzi benqubomgomo nakuma-EME futhi inomthelela emibonweni yokuthi izimbangela zokwehla kwamandla emali kuma-EME zinezinhlangothi eziningi futhi zinamandla. Ngakho-ke, abenzi benqubomgomo kumazwe asafufusa kudingeka bakwazi ukunikeza izixazululo ezinkambisweni zokwehla kwamandla emali okuholela ekukhiqizeni okuphezulu, nokuncipha kokuntuleka kwemisebenzi, kanye nokwenza ngcono kwamazinga okuphila. | |
| dc.identifier.uri | https://uzspace.unizulu.ac.za/handle/10530/2560 | |
| dc.language.iso | en | |
| dc.publisher | University of Zululand | |
| dc.title | Analysing the impact of wage rate and inflation on labour productivity among selected early inflation-targeting countries and emerging market economies | |
| dc.title.alternative | Wage rate and inflation on labour productivity | |
| dc.type | Thesis |