- Title
- Business cycle synchronization in SACU countries: a wavelet coherence analysis
- Creator
- Khoza, Sithobile X
- Subject
- Economic cycles
- Subject
- Synchronization -- (SACU) Countries
- Date Issued
- 2022-12
- Date
- 2022-12
- Type
- Master's theses
- Type
- Thesis
- Identifier
- http://hdl.handle.net/10948/60221
- Identifier
- vital:63844
- Description
- The discussion on the viability of the Southern African Customs Union (SACU) as a monetary union has been ongoing for years. SACU is the oldest Customs Union in history, formed in 1910. Employing the Optimum Currency Areas (OCA) theory, the study examined SACU’s readiness for a single currency. There are several technical requirements needed to form an OCA, however, one of the most vital of these with regards to a country’s suitability to enter a currency union is Business Cycle Synchronization. Therefore, SACU’s readiness was tested by establishing Business Cycle synchronization between the 5 member states. Although Business Cycles Synchronization have not been proven, SACU countries have moved towards a complete monetary union because of increasing macroeconomic convergence. Our study using Wavelet analysis sets out to establish if there is a synchronization of Business cycles with SACU members. Cyclical components were isolated, from the real GDP growth rate of each country from 1981 to 2020, using the Hodrick-Prescott filter (HP), Band-Pass filter (BP), and the Christiano-Fitzgerald Filter (CF). In the 2 by 2 analysis, our wavelet coherence showed that SACU countries are synchronized with each other, while South Africa displayed its dominance in the union by showing significant synchronization with all the members of the union both in the short and long run. The Vector wavelet analysis results concluded that, as a group, SACU shows much higher degrees of synchronization. The group synchronization is statistically significant throughout the period of study. Furthermore, there is an indication of consistent synchronization, in the long and short run. Overall, the results of our study conclude that there is synchronization in the SACU countries. Therefore, SACU counties can form an OCA as they meet the desirably requirements.
- Description
- Thesis (MCom) -- Faculty of Business and Economic Sciences, 2022
- Format
- computer
- Format
- online resource
- Format
- Format
- 1 online resource (133 pages)
- Publisher
- Nelson Mandela University
- Publisher
- Faculty of Business and Economic Sciences
- Language
- English
- Rights
- Nelson Mandela University
- Rights
- All Rights Reserved
- Rights
- Open Access
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NMU School for Economics, Development and Tourism
| Thumbnail | File | Description | Size | Format | |||
|---|---|---|---|---|---|---|---|
| View Details Download | SOURCE1 | Khoza,S Dec 2022.pdf | 4 MB | Adobe Acrobat PDF | View Details Download |