Full Text Available
Note: Clicking the button above will open the full text document at the original institutional repository in a new window.
From ambiguity to action: Rethinking the origins of shocks and crises
Thesis (PhD)--Stellenbosch University, 2026.
Saved in:
| Main Author: | |
|---|---|
| Other Authors: | |
| Format: | Thesis |
| Language: | English |
| Published: |
Stellenbosch : Stellenbosch University
2026
|
| Tags: |
No Tags, Be the first to tag this record!
|
| _version_ | 1867613819870642176 |
|---|---|
| access_status_str | Open Access |
| author | Van Jaarsveld, Lauren Anne |
| author2 | Reid, Monique |
| author_browse | Reid, Monique Van Jaarsveld, Lauren Anne |
| author_facet | Reid, Monique Van Jaarsveld, Lauren Anne |
| author_sort | Van Jaarsveld, Lauren Anne |
| collection | Thesis |
| dc_rights_str_mv | Stellenbosch University |
| description | Thesis (PhD)--Stellenbosch University, 2026. |
| format | Thesis |
| id | oai:scholar.sun.ac.za:10019.1/135667 |
| institution | Stellenbosch University (South Africa) |
| language | English |
| last_indexed | 2026-06-10T12:42:12.448Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from SUNScholar — Stellenbosch University Repository |
| publishDate | 2026 |
| publishDateRange | 2026 |
| publishDateSort | 2026 |
| publisher | Stellenbosch : Stellenbosch University |
| publisherStr | Stellenbosch : Stellenbosch University |
| record_format | dspace |
| source_str | SUNScholar — Stellenbosch University Repository |
| spelling | oai:scholar.sun.ac.za:10019.1/135667 From ambiguity to action: Rethinking the origins of shocks and crises Van Jaarsveld, Lauren Anne Reid, Monique Siklos, Pierre Kirsten, Johann Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Economics. Thesis (PhD)--Stellenbosch University, 2026. Van Jaarsveld, L. A. 2026. From ambiguity to action: Rethinking the origins of shocks and crises. Unpublished doctoral dissertation. Stellenbosch: Stellenbosch University [online]. Available: https://scholar.sun.ac.za/items/38278470-fa47-4f41-9d94-8938bdbce8c7 Despite decades of research into macroeconomic instability, the mechanisms by which shocks evolve into crises remain poorly understood. Conventional models often treat crises as discrete, exogenous events, overlooking the informational dynamics that precede them. In addition, the conceptual boundary between a shock and a crisis remains blurred, limiting both empirical diagnostics and policy effectiveness. This dissertation confronts that ambiguity by diagnosing shocks and crises, from perspectives grounded in information asymmetry, narrative dynamics, and predictive modelling. Motivated by the limitations of conventional macroeconomic indicators in capturing early-stage systemic stress, it rethinks how crises originate, evolve, and are interpreted – particularly within the South African context. The conceptual foundation is established in the 'Introduction' (Chapter 1) of the dissertation, by examining how information asymmetries and definitional ambiguity shape the recognition and classification of shocks and crises. It adapts an explanatory device called the Johari Window to economic decision-making environments, distinguishing between what is known and unknown to policymakers and the broader public. There is a lack of clarity in the literature about the theoretical and empirical characteristics of ‘shocks’ and ‘crises’. Clarifying these concepts is essential for building interpretable early-warning models and designing policy-relevant interventions. Chapter 1 complements the existing literature, including Brunnermeier and Oehmke's (2012) distinction between the ‘build-up’ and ‘run-up’ phases of a crisis, by highlighting the need for more consistent terminology and sharper diagnostic boundaries to support empirical precision and information awareness. Shocks can encompass trigger events foreseen by at least some stakeholders. In Chapter 2, we suggest that early warning signals prior to a shock can be identified by detecting speculative bubbles in the sovereign bond markets. We argue that when a speculative bubble precedes a known financial crash date, the shock was anticipated to some extent (has an endogenous origin). To identify the potential dates of shocks, we propose employing a wavelet filter-based denoising approach. These dates are then compared with the speculative bubbles detected using the Log Periodic Power Law model, inspired by the intersection of expectations theory and the theoretical framework of physics concerning critical phenomena. Shock identification and the detection of speculative bubbles provide a harmonized methodological approach to distinguish between shocks that are exogenous and endogenous in origin. Our findings provide an early warning signal of sorts to policymakers, providing them with a compass to navigate the link between financial turbulence and financial crises. Chapter 3 defines a crisis as a critical disruption of the functioning, legitimacy, or stability of an economic, political, or social system, characterized by heightened uncertainty, accelerated change, and the potential for significant loss or transformation. Crises present formidable challenges for decisionmakers, which are exacerbated by limited data availability and intricate dynamics. We employ dictionary methods to analyze the crises that South Africa is exposed to, utilizing soft data sourced from the Bureau for Economic Research’s (BER) ‘Weekly Reviews’. We adapted the crisis dictionary developed by Bétin and Collodel (2021) to incorporate South African-specific terminology and crisis phenomena. Subsequently, we applied this tailored dictionary to the corpus, examining the frequency of specific crisis categories spanning 2013 to 2023. Using this approach, we uncovered patterns and insights that have deepened our understanding of crisis dynamics, and thus developed the Crisis Intensity Score (CIS). Our findings underscore the effectiveness of these methods in extracting meaningful information from extensive text corpora at a weekly frequency, thereby enhancing our ability to navigate and comprehend the different types of crises that South Africa is exposed to. Chapter 4 addresses the challenge of choosing policy actions under uncertainty. Policymakers often face ambiguity about when to respond to early-warning signals, especially under conditions of Knightian uncertainty. Using a LASSO-logit framework, selected macro-financial indicators from the South African Reserve Bank’s financial stability heatmap are employed. This chapter identifies robust predictors of crisis onset – including both conventional metrics and less traditional indicators such as household debt-to-income ratios and insurance sector liquidity mismatches. To guide intervention timing, it introduces signal-based diagnostics and policy loss functions that visualize trade-offs between the risks of false positives and the risks of missed crises, under varying institutional preferences. These tools offer a structured way to calibrate thresholds and improve decision-making under uncertainty. Together, these chapters contribute to a crisis and shock diagnostic framework that is conceptually coherent, empirically grounded, and practically relevant. Hence, this dissertation advances the literature by clarifying the boundary between shocks and crises, integrating narrative and speculative signals into early-warning systems, and offering policy tools that are sensitive to institutional constraints and epistemic blind spots. By moving from ambiguity to action, it equips policymakers with the means to detect, interpret, and respond to systemic stress with greater precision and adaptability. Doctoral 2026-04-07T10:10:27Z 2026-04-07T10:10:27Z 2026-03 Thesis https://scholar.sun.ac.za/handle/10019.1/135667 en Stellenbosch University 105 pages application/pdf Stellenbosch : Stellenbosch University |
| spellingShingle | Van Jaarsveld, Lauren Anne From ambiguity to action: Rethinking the origins of shocks and crises |
| title | From ambiguity to action: Rethinking the origins of shocks and crises |
| title_full | From ambiguity to action: Rethinking the origins of shocks and crises |
| title_fullStr | From ambiguity to action: Rethinking the origins of shocks and crises |
| title_full_unstemmed | From ambiguity to action: Rethinking the origins of shocks and crises |
| title_short | From ambiguity to action: Rethinking the origins of shocks and crises |
| title_sort | from ambiguity to action rethinking the origins of shocks and crises |
| url | https://scholar.sun.ac.za/handle/10019.1/135667 |
| work_keys_str_mv | AT vanjaarsveldlaurenanne fromambiguitytoactionrethinkingtheoriginsofshocksandcrises |