VOLUME / UITGAWE 67
No. 4, December 1999
Nr. 4, Desember 1999
ABSTRACTS OF ARTICLES /
SAMEVATTING VAN ARTIKELS
Volume 67, No. 4, December 1999
Uitgawe 67, Nr. 4, Desember 1999
THE
MONETARY APPROACH:
A METHODICAL APPRAISAL
DUNCAN HODGE
This paper examines the reasons why
the monetary approach superseded the Keynesian analysis of the balance of payments and
exchange rates in the late 1960s and 1970s. Lakatos's methodology of scientific
research programmes is applied to the monetary approach to see how well it has met
criteria of theoretical and empirical progress. The main findings are that the
monetary approach may be construed as having been theoretically progressive but has not
had much empirical success, particularly as a theory of exchange rate determination.
Some reasons for this are offered and the application of falsificationist criteria
in economics is questioned.
ON THE
LITERATURE OF THE ECONOMICS
OF TECHNOLOGICAL CHANGE
D.E. KAPLAN
The significant reformulation of
South Africa’s S&T policy post-1994, borrowed extensively from a growing
academic literature linkage knowledge production with technological change. In
particular, the concept of a National System of Innovation, became the central organising
concept for the government's White Paper. Institutional reform, institutional
linkages and the centrality of diffusion were perspectives informing policy.
However, this literature was less
effective in translating concepts and perspectives into policy to promote technological
capability and diffusion and in the restructuring of S&T institutions. This
reflects gaps and ambiguities in the literature, while the realities of a resource
constrained industrialising country challenge keep precepts of the theory.
GLOBAL
FINANCIAL ARCHITECTURE
IN A TIME OF CHANGE
C TAYLOR
Two developments have dominated
international financial affairs recently: the crises in emerging markets and the start of
a monetary union in Europe. EMU will have important global implication, because it
will in time become a key international currency, rivaling the dollar. There is a
risk that the euro exchange rate will display as much variability as the dollar's, so
augmenting long-run currency instability. The turbulence that overwhelmed East Asian
economies in 1998, stemmed partly from their increased exposure to erratic international
capital movements. Remedies should include some but not all elements of the 'new
financial architecture' in reform programmes, but not a wholesome reversion to exchange
controls. Paradoxically, ultimate progress towards global currency co-operation may
happen more effectively through monetary polarisation - the extension of key currency
areas based on the dollar, euro and perhaps the yen - than through the bilaterism favoured
by the US authorities or the 'open regionalism' advocated by some liberal economists.
ON TESTING
CROSS-SECTION GROWTH MODELS
S. McDONALD and JENNIFER ROBERTS
In recent years economic policy
advice has been influenced by the partial correlations between policy variables and
economic performance found in cross-country empirical studies. The vast majority of
these empirical studies have adopted a cross-section method, which collapses the dynamics
of the data. The analyses reported in this paper uses panel data techniques to
examine the validity of this method by testing a variant of the augmented Solow growth
model. In particular the presumption that initial technologies, rates of technical
progress and preferences are common across countries and time is tested and rejected.
It is concluded that the cross-section method is unlikely to be valid and hence
that results so derived are an inadequate basis for the formulation of policy advice.
POLARISED
DEVELOPMENT IN A SADC FREE TRADE AREA
C.L. McCARTHY
The pending free trade within the
Southern African Development Community (SADC) will integrate economies that are unequal in
size and level of development. Theory and experience would seem to indicate that
polarised development in favour of South Africa will be the outcome. The paper
explains this presumed polarisation but then goes on to argue that there are forces at
work that will encourage cross-border investment by South African firms in the region.
This will create much needed capacity to produce tradable goods in SADC's smaller
economies, which means that there will be a counter to polarisation.
INFLATION
TARGETING IN SOUTH AFRICA
T.T. MBOWENI
The objective of this article is to
explain why inflation targeting will leaf to move effective monetary policy.
Although this monetary policy framework is a complicated approach to implement, it
has the advantages that it could improve the co-ordination between macroeconomic policies
and lead to greater transparency as well as discipline in the implementation of monetary
policy. To achieve this greater efficiency it is, however, important that the
authorities are committed to the goal of price stability, that there exist a
well-developed financial market and that the central bank has the necessary resources to
implement inflation targets. |
