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Nutrition and economic growth in South Africa: A momentum threshold autoregressive (MTAR) approach

Phiri, Andrew and Dube, Wisdom (2014): Nutrition and economic growth in South Africa: A momentum threshold autoregressive (MTAR) approach.

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Abstract

Purpose: This purpose of our paper is to examine asymmetric co-integration effects between nutrition and economic growth for annual South African data from the period 1961-2013.

Design/methodology/approach: We deviate from the conventional assumption of linear co-integration and pragmatically incorporate asymmetric effects in the framework through a fusion of the momentum threshold autoregressive and threshold error correction (MTAR-TEC) model approaches, which essentially combines the adjustment asymmetry model of Enders and Silkos (2001); with causality analysis as introduced by Granger (1969); all encompassed by/within the threshold autoregressive (TAR) framework, a la Hansen (2000).

Findings: The findings obtained from our study uncover a number of interesting phenomena for the South Africa economy. Firstly, in coherence with previous studies conducted for developing economies, we establish a positive relationship between nutrition and economic growth with an estimated income elasticity of nutritional intake of 0.15. Secondly, we find bi-direction causality between nutrition and economic growth with a stronger causal effect running from nutrition to economic growth. Lastly, we find that in the face of equilibrium shocks to the variables, policymakers are slow to responding to deviations of the variables from their co-integrated long run steady state equilibrium.

Originality/value: In our study, we make a novel contribution to the literature by exploring asymmetric modelling in the correlation between nutrition intake and economic growth for the exclusive case of South Africa.

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