• Road to riches

    Taxpayers keep funding structures with big plans but who knows what efficacy, says Mandi Smallhorne.

  • Don't fall for Ponzi scams

    An expert unpacks the tell-tale signs to watch out for.

  • Inside Labour

    A smokescreen of misleading rhetoric won't make SA's problems go away, says Terry Bell.

See More

Rates no weapon against unemployment

Nov 01 2012 16:32 Sapa

Related Articles

SA unemployment on the rise

Pay disparities persist - Zuma

Long queues at job fair

R5.5bn for jobs fund

Marcus warns of vicious cycle of strikes

De Klerk lambastes ANC policies


Johannesburg - Unemployment cannot be solved through monetary policy, but by correcting structural impediments in the economy, an SA Reserve Bank (Sarb) conference heard on Thursday.

"Monetary policy cannot do anything about structural unemployment," said Princeton University academic Jean-Pierre Landau.

"We now have maybe 40 or 50 years of experience. We know that there is nothing that monetary policy can do about unemployment."

He said monetary policy could try to prevent cyclical unemployment from translating into structural unemployment, which was what some advanced economies were trying to do.

"We know it’s a big mistake to try and fight unemployment with monetary policy. It creates inflation which is very bad for the poor people," he said.

"We tried in our countries in the '60s and '50s to fight unemployment through excessive monetary policy. All we got was very high inflation. We know now that it does not work."

The Congress of SA Trade Unions has on several occasions called on the government to expand the Sarb mandate to include job creation and economic growth.

Dr Azar Jammine, chief economist at Econometrix, echoed Landau’s views.

"Interest rates only have a limited capacity to influence economic growth. They do help sometimes in a very short-term, but there is always a risk."

Jammine said central banks did not exist 100 years ago and job creation depended on economic policy.

There were structural impediments to job creation in this country.

"In South Africa right now, the biggest impediment... is the fact that so many of our population are not educated and not skilled properly," Jammine said.

"This does have its origins in the apartheid system, but even since the death of apartheid, 18 years have passed [and] we have continued going backwards."


Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Add your comment
Comment 0 characters remaining

Company Snapshot

We're talking about:


Johannesburg has been selected to host the Global Entrepreneurship Congress in 2017. "[The congress] will ensure that small business development remains firmly on the national agenda and the radar screen of all stakeholders, the Small Business Development minister said.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

People who fall victim to Ponzi scams are:

Previous results · Suggest a vote