VOLUME / UITGAWE 68
No. 2, June 2000
Nr. 2, Junie 2000
ABSTRACTS OF ARTICLES /
SAMEVATTING VAN ARTIKELS
Volume 68, No. 2, June 2000
Uitgawe 68, Nr. 2, Junie 2000
THE DEMAND
FOR MONEY IN SOUTH AFRICA
PARAMETER STABILITY AND PREDICTIVE CAPACITY
P.G. MOLL
A money demand function involving M3
is found for South Africa for 1965:3 - 1998:3. A variety of tests show that the
equation has stable parameters and that it can predict accurately. Despite financial
innovation and the financial liberalisation of the early1980s, there is no evidence of
structural change in the money demand relation. The surge of M3 between
1993 and 1998 can be explained on the basis of income growth and the deadline of
inflation. The authorities' M3 target zone - which has only rarely
straddled the realised value of M3 - would be more meaningful if it reflected
these changes in the underlying determinants of money demand.
IS FISCAL
SUSTAINABILITY ATTAINABLE? HIGH INTEREST RATES,
LOW GROWTH AND THE GENERAL BALANCE EFFECT
F. CvN FOURIE and P. BURGER
The conventional prescription for
fiscal sustainability is a primary budget surplus. This can impact negatively on
certain sectors of society, especially in developing countries. The paper first
considers whether the world has entered a high interest era. If so, what are the
implications for establishing fiscal sustainability, especially in developing countries?
Secondly, it is shown that, following the adoption of a primary surplus path,
changes in the fiscal balance could lead to a detrimental impact of financial balances in
other sectors, i.e. it merely shifts the problem rather than solve it. Who absorbs
this, and what are the consequences? Are primary surpluses really the solution?
What is the role of the monetary policy? Post-apartheid South Africa presents
an interesting case study.
THE
DETERMINANTS OF SOUTH AFRICAN EXPORTS:
AN ECONOMETRIC ANALYSIS
W. NAUDE
In light of the importance of
export growth for the South African economy this paper attempts to determine the
statistically significant determinants of exports for South Africa. Following the
economics literature, a combined model is identified that contains as determinants of the
volume of South Africa's exports the real exchange rate, domestic GDP, foreign GDP,
capacity illusion, labour productivity and the share of manufacturing output in GDP.
These variables are found to be non-stationary and moreover, not cointegrated.
As a result a model using only differenced quarterly data covering the period 1974
- 1998 was fitted. Given this sample, none of the determinants included was found to
be statistically significant.
OPENNESS,
THE TERMS OF TRADE AND TRADE
POLICY IN NATURAL RESOURCE ECONOMIES
MERLE HOLDEN
This paper examines changes in the
stance of trade policy in natural resource economies suggesting that the various indices
of openness have been used in the literature fail to fully capture the degree to which an
economy is liberalised. The paper therefore develops a data base for natural
resource economies that captures discreet changes in trade policy. The paper
examines whether natural resource economies that have changed their trade regimes have
responded to changes in their terms of trade. It was found that a deterioration in
terms of trade had in many instances influenced the decision of these economies to
liberalise. Conversely it was found that improvements in the terms of trade had led
to greater protection.
EXPLAINING
DE-AGRICULTURALISATION IN NIGERIA:
THEORY AND EVIDENCE
R. ILORAH
This article presents an
econometric investigation of the supply of Nigerian export crops, namely, cocoa, palm oil,
palm kernels, groundnuts, cotton and rubber. We develop a simple theoretical model
of a farm household and derive comparative static results. The model provides
information about variables influencing the supply of export crops, and the supply
functions are estimated using time series data for Post-World War II period. It is
shown that the supply of export crops is reduced as expected earnings in the urban sector
is increased. On the other hand, the supply is increased as producer prices are
raised.
DJJ
BOTHA: RES GESTAE 1973 - 2000
M.L. TRUU
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AGRICULTURAL
POLICY REFORM IN SOUTH AFRICA AND THE
AGRICULTURAL DEMOCRATIZATION OF SOUTH AFRICA (BOOK REVIEW)
H. I. BEHRMANN
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