Business cycles reflect changes over time in the amount of trade between individuals. In this paper we show that incorporating explicitly intra-temporal gains from trade between individuals into a macroeconomic model can provide new insight into the potential mechanisms driving economic...

In this paper, we study the co-movement of the government budget balance and the trade balance at business cycle frequencies. In a sample of 10 OECD countries we find that the correlation of the two time series is negative, but less so in more open economies. Moreover, for the US the...

We model a South African city during Apartheid (in which both schooling and mobility are restricted on the basis of race) and after Apartheid (in which no restrictions are imposed). We first show that the inequality between blacks and whites decreases when Apartheid laws are removed. Indeed,...

Inflation targeting central banks will be hampered without good models to assist them to be forward-looking. Many current inflation models fail to forecast turning points adequately, because they miss key underlying long-run influences. The world is on the cusp of a dramatic turning point in...

South Africa has undergone a remarkable transformation since its democratic transition in 1994, but economic growth and employment generation have been disappointing. Most worryingly, unemployment is currently among the highest in the world. While the proximate cause of high unemployment is that...

There have been important studies of overall income inequality and of poverty in South Africa. In this paper, we approach the subject from a different direction: the extent and evolution of top incomes. We present estimates of the shares in total income of groups such as the top 1 per cent and...

Understanding how import prices adjust to exchange rates helps anticipate inflation effects and monetary policy responses. This paper examines exchange rate passthrough to the monthly import price index in South Africa during 1980-2009. A methodological innovation allows various short-run...

Using census data for 1996, 2001 and 2007 we study the labor market effect of immigration to South Africa. The paper contributes to a small but growing literature on the impact of South-South migration by looking at one of the most attractive destinations for migrant workers in Sub--Saharan...

Evaluations of new infrastructure in developing countries typically focus on direct effects, such as the impact of an electrifification program on household energy use. But if new infrastructure induces people to move into an area, other local publicly provided goods may become congested,...

Drought is Africa’s primary natural disaster and a pervasive source of income risk for poor households. This paper documents the long-run health effects of early life exposure to drought and investigates an important source of heterogeneity in these effects. Combining birth cohort variation in...