The effect of real exchange rate volatility on export performance: evidence from South Africa (2000-2011)
- Authors: Chamunorwa, Wilson
- Date: 2014
- Subjects: Monetary policy -- South Africa , Economic development -- South Africa , Foreign exchange rates -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11499 , http://hdl.handle.net/10353/d1018600 , Monetary policy -- South Africa , Economic development -- South Africa , Foreign exchange rates -- South Africa
- Description: The effect of real exchange rate volatility on export performance: evidence from South Africa (2000-2011) This study sought to investigate the relationship between exchange rate volatility and export performance in South Africa. The main objective of the study was to examine the impact of exchange rate volatility on export performance in South Africa. This relationship was examined using GARCH methods. Exports were regressed against real effective exchange rate, trade openness and capacity utilisation. The research aimed to establish whether exchange rate volatility impacts negatively on export performance in the manner suggested by the econometric model. The result obtained showed that exchange rate volatility had a significantly negative effect on South African exports in the period 2000-2011.
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- Authors: Chamunorwa, Wilson
- Date: 2014
- Subjects: Monetary policy -- South Africa , Economic development -- South Africa , Foreign exchange rates -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11499 , http://hdl.handle.net/10353/d1018600 , Monetary policy -- South Africa , Economic development -- South Africa , Foreign exchange rates -- South Africa
- Description: The effect of real exchange rate volatility on export performance: evidence from South Africa (2000-2011) This study sought to investigate the relationship between exchange rate volatility and export performance in South Africa. The main objective of the study was to examine the impact of exchange rate volatility on export performance in South Africa. This relationship was examined using GARCH methods. Exports were regressed against real effective exchange rate, trade openness and capacity utilisation. The research aimed to establish whether exchange rate volatility impacts negatively on export performance in the manner suggested by the econometric model. The result obtained showed that exchange rate volatility had a significantly negative effect on South African exports in the period 2000-2011.
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The impact of financial development on private investment in south Africa
- Authors: Mukuya, Prisca R
- Date: 2014
- Subjects: Economic development -- South Africa , Gross domestic product -- South Africa , Investments, Foreign -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11488 , http://hdl.handle.net/10353/d1018210 , Economic development -- South Africa , Gross domestic product -- South Africa , Investments, Foreign -- South Africa
- Description: Empirical evidence and theoretical propositions suggest that financial development is strongly correlated to private investment because financial development positively affects investments by affecting capital accumulation, altering savings rate or by channelizing savings to various capital producing technologies. This study empirically investigated the impact of financial development on private investment in South Africa using quarterly data for the period 1994/01 to 2011/04. This study assess whether the theoretical and empirical propositions can be supported in South Africa. Cointegration tests using the Johansen approach (1988) were conducted to examine if there is a stable relationship in the level of private investment and financial development in South Africa. As a proxy for financial sector development, credit to private sector as per cent of GDP and stock market development were employed. Other variables that affect investment such as real interest rates and real GDP were also included in the model. Results of the study indicate that stock market development and real GDP have a positive relationship with private investment. Bank credit to the private sector however showed a negative relationship with private investment. A negative relationship was also noted for the relationship between private investment and real interest rates.
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- Authors: Mukuya, Prisca R
- Date: 2014
- Subjects: Economic development -- South Africa , Gross domestic product -- South Africa , Investments, Foreign -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11488 , http://hdl.handle.net/10353/d1018210 , Economic development -- South Africa , Gross domestic product -- South Africa , Investments, Foreign -- South Africa
- Description: Empirical evidence and theoretical propositions suggest that financial development is strongly correlated to private investment because financial development positively affects investments by affecting capital accumulation, altering savings rate or by channelizing savings to various capital producing technologies. This study empirically investigated the impact of financial development on private investment in South Africa using quarterly data for the period 1994/01 to 2011/04. This study assess whether the theoretical and empirical propositions can be supported in South Africa. Cointegration tests using the Johansen approach (1988) were conducted to examine if there is a stable relationship in the level of private investment and financial development in South Africa. As a proxy for financial sector development, credit to private sector as per cent of GDP and stock market development were employed. Other variables that affect investment such as real interest rates and real GDP were also included in the model. Results of the study indicate that stock market development and real GDP have a positive relationship with private investment. Bank credit to the private sector however showed a negative relationship with private investment. A negative relationship was also noted for the relationship between private investment and real interest rates.
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The impact of foreign debt on economic growth in South Africa
- Authors: Shayanewako, V B
- Date: 2013
- Subjects: Debts, External -- South Africa -- Eastern Cape , Investments, Foreign -- South Africa , Government spending policy -- South Africa , Economic development -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11477 , http://hdl.handle.net/10353/d1015140 , Debts, External -- South Africa -- Eastern Cape , Investments, Foreign -- South Africa , Government spending policy -- South Africa , Economic development -- South Africa
- Description: This study analyses the economic impact between foreign debt and economic growth in South Africa. By fitting a production function model to annual data for the period 1980-2011, the study examines the dynamic effect of debt service, capital stock and labour force on the economic growth of the country. By following Cunningham (1993), it has identified the long-run and short-run causal relationships among the included variables. The results indicate that the debt servicing burden has a negative effect on the productivity of labour and capital, and thereby affect economic growth adversely. The results also illustrate that the debt service ratio tends to negatively affect GDP and the rate of economic growth in the long-run, which, in turn, reduces the ability of the country to service its debt. Similarly, the estimated error correction term shows the existence of a significant long-run causal relationship among the specified variables. Overall, the results suggest the existence of short-run and long-run causal relationships running from debt service to GDP.
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- Authors: Shayanewako, V B
- Date: 2013
- Subjects: Debts, External -- South Africa -- Eastern Cape , Investments, Foreign -- South Africa , Government spending policy -- South Africa , Economic development -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11477 , http://hdl.handle.net/10353/d1015140 , Debts, External -- South Africa -- Eastern Cape , Investments, Foreign -- South Africa , Government spending policy -- South Africa , Economic development -- South Africa
- Description: This study analyses the economic impact between foreign debt and economic growth in South Africa. By fitting a production function model to annual data for the period 1980-2011, the study examines the dynamic effect of debt service, capital stock and labour force on the economic growth of the country. By following Cunningham (1993), it has identified the long-run and short-run causal relationships among the included variables. The results indicate that the debt servicing burden has a negative effect on the productivity of labour and capital, and thereby affect economic growth adversely. The results also illustrate that the debt service ratio tends to negatively affect GDP and the rate of economic growth in the long-run, which, in turn, reduces the ability of the country to service its debt. Similarly, the estimated error correction term shows the existence of a significant long-run causal relationship among the specified variables. Overall, the results suggest the existence of short-run and long-run causal relationships running from debt service to GDP.
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The impact of stock market development on economic growth: evidence from South Africa
- Authors: Vacu, Nomfundo Portia
- Date: 2013
- Subjects: Stock exchanges -- South Africa , Economic development -- South Africa , Stocks -- Economic aspects -- South Africa , South Africa -- Economic conditions , Stock market development , Economic growth , South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11655 , http://hdl.handle.net/10353/d1006983 , Stock exchanges -- South Africa , Economic development -- South Africa , Stocks -- Economic aspects -- South Africa , South Africa -- Economic conditions , Stock market development , Economic growth , South Africa
- Description: The main objective of this study is to examine the long run relationship between stock market development and economic growth in the case of South Africa. The study used quarterly data covering the period from 1990Q1 to 2010Q4. To empirically test the link between the two variables, the study used the Johnson’s cointegration approach and Granger causality so as to test the direction of the relationship. The Vector Error Correction Model was also employed to capture both short run and long run dynamics. Generally, the results reveal that a long run relationship exists between the two variables and the causality flows from economic growth to stock market development. Also, the extent to which of stock market development impacts on growth is statistically weak.
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- Authors: Vacu, Nomfundo Portia
- Date: 2013
- Subjects: Stock exchanges -- South Africa , Economic development -- South Africa , Stocks -- Economic aspects -- South Africa , South Africa -- Economic conditions , Stock market development , Economic growth , South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11655 , http://hdl.handle.net/10353/d1006983 , Stock exchanges -- South Africa , Economic development -- South Africa , Stocks -- Economic aspects -- South Africa , South Africa -- Economic conditions , Stock market development , Economic growth , South Africa
- Description: The main objective of this study is to examine the long run relationship between stock market development and economic growth in the case of South Africa. The study used quarterly data covering the period from 1990Q1 to 2010Q4. To empirically test the link between the two variables, the study used the Johnson’s cointegration approach and Granger causality so as to test the direction of the relationship. The Vector Error Correction Model was also employed to capture both short run and long run dynamics. Generally, the results reveal that a long run relationship exists between the two variables and the causality flows from economic growth to stock market development. Also, the extent to which of stock market development impacts on growth is statistically weak.
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Financial liberalisation and economic growth in South Africa
- Sibanda, Hlanganani Siqondile.
- Authors: Sibanda, Hlanganani Siqondile.
- Date: 2012
- Subjects: Economic development -- South Africa , Monetary policy -- South Africa , Finance -- Management , Capital movements -- South Africa , Free trade -- South Africa , Expenditures, Public
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11471 , http://hdl.handle.net/10353/d1007131 , Economic development -- South Africa , Monetary policy -- South Africa , Finance -- Management , Capital movements -- South Africa , Free trade -- South Africa , Expenditures, Public
- Description: This study examined the impact of financial liberalisation on economic growth in South Africa. The study used quarterly time series data for the period 1980 to 2010. A vector error correction model was used to determine the short run and long run effects of financial liberalisation on economic growth in South Africa. The other explanatory variables considered in this study were government expenditure, investment ratio, public expenditure on education and trade openness. Results from this study revealed that financial liberalisation, government expenditure and public expenditure on education have a positive impact on economic growth while trade openness negatively affects economic growth in South Africa. Policy recommendations were made using these results.
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- Authors: Sibanda, Hlanganani Siqondile.
- Date: 2012
- Subjects: Economic development -- South Africa , Monetary policy -- South Africa , Finance -- Management , Capital movements -- South Africa , Free trade -- South Africa , Expenditures, Public
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11471 , http://hdl.handle.net/10353/d1007131 , Economic development -- South Africa , Monetary policy -- South Africa , Finance -- Management , Capital movements -- South Africa , Free trade -- South Africa , Expenditures, Public
- Description: This study examined the impact of financial liberalisation on economic growth in South Africa. The study used quarterly time series data for the period 1980 to 2010. A vector error correction model was used to determine the short run and long run effects of financial liberalisation on economic growth in South Africa. The other explanatory variables considered in this study were government expenditure, investment ratio, public expenditure on education and trade openness. Results from this study revealed that financial liberalisation, government expenditure and public expenditure on education have a positive impact on economic growth while trade openness negatively affects economic growth in South Africa. Policy recommendations were made using these results.
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The effect of foreign direct investment on economic growth: evidence from South Africa
- Authors: Mazenda, Adrino
- Date: 2012
- Subjects: International Monetary Fund , Investments, Foreign -- South Africa , Economic development -- South Africa , International finance , Finance -- Developing countries
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11462 , http://hdl.handle.net/10353/d1007027 , International Monetary Fund , Investments, Foreign -- South Africa , Economic development -- South Africa , International finance , Finance -- Developing countries
- Description: Foreign direct investment amongst other mechanisms provides capital inflow meant to stimulate economic growth. Apart from promoting economic growth, FDI can also lead to increase in employment, technology, technical knowhow and managerial skills. South Africa has implemented various policy initiatives in attempts to attract foreign investment. This study investigates on the effect of foreign direct investment on economic growth, with particular reference to the South African economy. The period of study is from 1980 to 2010. The study begins by reviewing literature on economic growth and foreign direct investment. South Africa’s macroeconomic background is examined to determine the trends in FDI inflows and economic growth. An empirical model linking theoretical and empirical literature on the effect of FDI on economic growth is estimated using the Johansen cointegration and VECM framework. Variables specified in the methodology include real gross domestic product (RGDP), foreign direct investment (FDI), domestic investment (INVE), real exchange rate (REXCH) and foreign marketable debt (DEBT). The long run results showed that FDI, REXCH and DEBT have a negative impact on growth. INVE has a positive impact on growth. Short run results indicated that there is no strong pressure on RGDP to restore long-run equilibrium whenever there is a disturbance. The short run lag of FDI was found to exert a positive impact on growth. The impulse response and variance decomposition analysis complemented the long and short-run findings. Shocks on REXCH, and DEBT generated a negative response on RGDP. The shocks were not significantly different from zero and were transitory. Results from the variance decomposition analysis revealed that the fundamentals explain some, but not all, of the variations of RGDP. For the fifth year forecast error variance RGDP explains the largest component of the variation followed by INVE, REXCH, FDI and DEBT. After a period of ten years, the influence of RGDP and INVE declines, whereas REXCH, FDI and DEBT increase. Conclusions and policy recommendations were made using these results.
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- Authors: Mazenda, Adrino
- Date: 2012
- Subjects: International Monetary Fund , Investments, Foreign -- South Africa , Economic development -- South Africa , International finance , Finance -- Developing countries
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11462 , http://hdl.handle.net/10353/d1007027 , International Monetary Fund , Investments, Foreign -- South Africa , Economic development -- South Africa , International finance , Finance -- Developing countries
- Description: Foreign direct investment amongst other mechanisms provides capital inflow meant to stimulate economic growth. Apart from promoting economic growth, FDI can also lead to increase in employment, technology, technical knowhow and managerial skills. South Africa has implemented various policy initiatives in attempts to attract foreign investment. This study investigates on the effect of foreign direct investment on economic growth, with particular reference to the South African economy. The period of study is from 1980 to 2010. The study begins by reviewing literature on economic growth and foreign direct investment. South Africa’s macroeconomic background is examined to determine the trends in FDI inflows and economic growth. An empirical model linking theoretical and empirical literature on the effect of FDI on economic growth is estimated using the Johansen cointegration and VECM framework. Variables specified in the methodology include real gross domestic product (RGDP), foreign direct investment (FDI), domestic investment (INVE), real exchange rate (REXCH) and foreign marketable debt (DEBT). The long run results showed that FDI, REXCH and DEBT have a negative impact on growth. INVE has a positive impact on growth. Short run results indicated that there is no strong pressure on RGDP to restore long-run equilibrium whenever there is a disturbance. The short run lag of FDI was found to exert a positive impact on growth. The impulse response and variance decomposition analysis complemented the long and short-run findings. Shocks on REXCH, and DEBT generated a negative response on RGDP. The shocks were not significantly different from zero and were transitory. Results from the variance decomposition analysis revealed that the fundamentals explain some, but not all, of the variations of RGDP. For the fifth year forecast error variance RGDP explains the largest component of the variation followed by INVE, REXCH, FDI and DEBT. After a period of ten years, the influence of RGDP and INVE declines, whereas REXCH, FDI and DEBT increase. Conclusions and policy recommendations were made using these results.
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The impact of capital flows on real exchange rates in South Africa
- Authors: Mishi, Syden
- Date: 2012
- Subjects: Capital movements -- South Africa , Economic development -- South Africa , Foreign exchange -- South Africa , Interest rates -- South Africa , Currency question -- South Africa , Saving and investment -- South Africa , Free trade -- South Africa , Anti-inflationary policies -- South Africa , Cointegration -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11466 , http://hdl.handle.net/10353/d1007089 , Capital movements -- South Africa , Economic development -- South Africa , Foreign exchange -- South Africa , Interest rates -- South Africa , Currency question -- South Africa , Saving and investment -- South Africa , Free trade -- South Africa , Anti-inflationary policies -- South Africa , Cointegration -- South Africa
- Description: The neoclassical theory suggests that free flows of external capital should be equilibrating and thereby facilitating smoothening of an economy's consumption or production patterns. South Africa has a very low savings rate, making it highly dependent on capital inflows which create instability and volatility in global markets. A policy dilemma is undoubtedly evident: capital inflows help to cater for the domestic low savings and at the same time the inflows pose instability, a threat on competitiveness and volatility challenges to the same economy due to their impact on exchange rates. The question is: are all forms of capital flows equally destabilizing? Since studies based on South Africa considered only the relationship between aggregate capital flows and real exchange rate, modelling individual components of capital flows could enlighten policy formulation even further. The composition of the flows and their effects on the composition of aggregate demand determine the evolution of real exchange rate response to surges in capital flows. Through co-integration and vector error correction modelling techniques applied to South African data between 1990 and 2010, the study found out that foreign portfolio investment exerts the greatest appreciation effect on the South African real exchange rate, followed by other investment and finally foreign direct investment. Thus the impact of capital flows on real exchange rate in South Africa differs by type of capital. This presents varied policy implications.
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- Authors: Mishi, Syden
- Date: 2012
- Subjects: Capital movements -- South Africa , Economic development -- South Africa , Foreign exchange -- South Africa , Interest rates -- South Africa , Currency question -- South Africa , Saving and investment -- South Africa , Free trade -- South Africa , Anti-inflationary policies -- South Africa , Cointegration -- South Africa
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11466 , http://hdl.handle.net/10353/d1007089 , Capital movements -- South Africa , Economic development -- South Africa , Foreign exchange -- South Africa , Interest rates -- South Africa , Currency question -- South Africa , Saving and investment -- South Africa , Free trade -- South Africa , Anti-inflationary policies -- South Africa , Cointegration -- South Africa
- Description: The neoclassical theory suggests that free flows of external capital should be equilibrating and thereby facilitating smoothening of an economy's consumption or production patterns. South Africa has a very low savings rate, making it highly dependent on capital inflows which create instability and volatility in global markets. A policy dilemma is undoubtedly evident: capital inflows help to cater for the domestic low savings and at the same time the inflows pose instability, a threat on competitiveness and volatility challenges to the same economy due to their impact on exchange rates. The question is: are all forms of capital flows equally destabilizing? Since studies based on South Africa considered only the relationship between aggregate capital flows and real exchange rate, modelling individual components of capital flows could enlighten policy formulation even further. The composition of the flows and their effects on the composition of aggregate demand determine the evolution of real exchange rate response to surges in capital flows. Through co-integration and vector error correction modelling techniques applied to South African data between 1990 and 2010, the study found out that foreign portfolio investment exerts the greatest appreciation effect on the South African real exchange rate, followed by other investment and finally foreign direct investment. Thus the impact of capital flows on real exchange rate in South Africa differs by type of capital. This presents varied policy implications.
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The impact of private capital flows on economic growth in South Africa
- Authors: Dzangare, Gillian
- Date: 2012
- Subjects: Economic development -- South Africa , Capital movements -- South Africa , Investments, Foreign -- South Africa , Development economics -- South Africa , Interest rates -- South Africa , Free trade -- South Africa , Cointegration -- South Africa , South Africa -- Commercial policy
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11472 , http://hdl.handle.net/10353/d1007134 , Economic development -- South Africa , Capital movements -- South Africa , Investments, Foreign -- South Africa , Development economics -- South Africa , Interest rates -- South Africa , Free trade -- South Africa , Cointegration -- South Africa , South Africa -- Commercial policy
- Description: In this study an analysis of the long-term equilibrium relationship between economic growth measured as real GDP growth and private capital inflows is explored. The link between private capital inflows and economic growth is well-documented in the literature. However, a void in the literature relates to examining the cointegrating relationship between private capital inflows and economic growth particularly for South Africa. It is widely claimed that private capital inflows foster economic growth by closing the savings/investment gap. However, clarity on this point is necessary because of the seemingly unclear nature of the relationship in the literature. The exact form of this relationship as well as the nature of capital flows that could impact on real growth requires further investigation. Moreover, what exactly happens to this relationship in an economic crisis such as recently recorded in the global financial crisis is not clear. The analysis is undertaken by employing cointegration and vector error correction modeling approach using quarterly data for the period 1989q4-2009q4. This study employs the Johansen (1998) cointegration test. This technique distinguishes itself since it establishes the long run relationship between variables. Thereafter, residual diagnostic checks are performed on the variables. Our results show among others, that private capital inflows have impacted positively on the growth of the South African economy. The areas for further research that emerge from this study include the effect of some government policies on economic growth that should also receive more attention in the future since political instability slows down investment.
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- Authors: Dzangare, Gillian
- Date: 2012
- Subjects: Economic development -- South Africa , Capital movements -- South Africa , Investments, Foreign -- South Africa , Development economics -- South Africa , Interest rates -- South Africa , Free trade -- South Africa , Cointegration -- South Africa , South Africa -- Commercial policy
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11472 , http://hdl.handle.net/10353/d1007134 , Economic development -- South Africa , Capital movements -- South Africa , Investments, Foreign -- South Africa , Development economics -- South Africa , Interest rates -- South Africa , Free trade -- South Africa , Cointegration -- South Africa , South Africa -- Commercial policy
- Description: In this study an analysis of the long-term equilibrium relationship between economic growth measured as real GDP growth and private capital inflows is explored. The link between private capital inflows and economic growth is well-documented in the literature. However, a void in the literature relates to examining the cointegrating relationship between private capital inflows and economic growth particularly for South Africa. It is widely claimed that private capital inflows foster economic growth by closing the savings/investment gap. However, clarity on this point is necessary because of the seemingly unclear nature of the relationship in the literature. The exact form of this relationship as well as the nature of capital flows that could impact on real growth requires further investigation. Moreover, what exactly happens to this relationship in an economic crisis such as recently recorded in the global financial crisis is not clear. The analysis is undertaken by employing cointegration and vector error correction modeling approach using quarterly data for the period 1989q4-2009q4. This study employs the Johansen (1998) cointegration test. This technique distinguishes itself since it establishes the long run relationship between variables. Thereafter, residual diagnostic checks are performed on the variables. Our results show among others, that private capital inflows have impacted positively on the growth of the South African economy. The areas for further research that emerge from this study include the effect of some government policies on economic growth that should also receive more attention in the future since political instability slows down investment.
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The impact of real exchange rates on economic growth: a case study of South Africa
- Authors: Sibanda, Kin
- Date: 2012
- Subjects: Economic development -- South Africa , Foreign exchange -- South Africa , Interest rates -- South Africa , Money supply -- South Africa , Free trade -- South Africa , Saving and investment -- South Africa , Devaluation of currency -- South Africa , Currency question -- South Africa , South Africa -- Economic policy
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11469 , http://hdl.handle.net/10353/d1007129 , Economic development -- South Africa , Foreign exchange -- South Africa , Interest rates -- South Africa , Money supply -- South Africa , Free trade -- South Africa , Saving and investment -- South Africa , Devaluation of currency -- South Africa , Currency question -- South Africa , South Africa -- Economic policy
- Description: This study examined the impact of real exchange rates on economic growth in South Africa. The study used quarterly time series data for the period of 1994 to 2010. The Johansen cointegration and vector error correction model was used to determine the impact of real exchange on economic growth in South Africa. The explanatory variables in this study were real exchange rates, real interest rates, money supply, trade openness and gross fixed capital formation. Results from this study revealed that real exchange rates, gross fixed capital formation and real interest rates have a positive long run impact on economic growth, while money supply and trade openness have a negative long run impact on economic growth in South Africa. From the regression results, it was noted that undervaluation of the currency significantly hampers growth in the long run, whilst it significantly enhances economic growth in the short run. As such, the policy of depreciating the exchange rates to achieve higher growth rates is only effective in the short run and is not sustainable in the long run. Based on the findings of this study, the researcher recommended that misalignment (overvaluation and undervaluation) of the currency should be avoided at all costs. In addition, the results of the study showed that interest rates also have a significant impact on growth and since interest rates have a bearing on the exchange rate, it was recommended that the current monetary policy in South Africa should be maintained.
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- Authors: Sibanda, Kin
- Date: 2012
- Subjects: Economic development -- South Africa , Foreign exchange -- South Africa , Interest rates -- South Africa , Money supply -- South Africa , Free trade -- South Africa , Saving and investment -- South Africa , Devaluation of currency -- South Africa , Currency question -- South Africa , South Africa -- Economic policy
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11469 , http://hdl.handle.net/10353/d1007129 , Economic development -- South Africa , Foreign exchange -- South Africa , Interest rates -- South Africa , Money supply -- South Africa , Free trade -- South Africa , Saving and investment -- South Africa , Devaluation of currency -- South Africa , Currency question -- South Africa , South Africa -- Economic policy
- Description: This study examined the impact of real exchange rates on economic growth in South Africa. The study used quarterly time series data for the period of 1994 to 2010. The Johansen cointegration and vector error correction model was used to determine the impact of real exchange on economic growth in South Africa. The explanatory variables in this study were real exchange rates, real interest rates, money supply, trade openness and gross fixed capital formation. Results from this study revealed that real exchange rates, gross fixed capital formation and real interest rates have a positive long run impact on economic growth, while money supply and trade openness have a negative long run impact on economic growth in South Africa. From the regression results, it was noted that undervaluation of the currency significantly hampers growth in the long run, whilst it significantly enhances economic growth in the short run. As such, the policy of depreciating the exchange rates to achieve higher growth rates is only effective in the short run and is not sustainable in the long run. Based on the findings of this study, the researcher recommended that misalignment (overvaluation and undervaluation) of the currency should be avoided at all costs. In addition, the results of the study showed that interest rates also have a significant impact on growth and since interest rates have a bearing on the exchange rate, it was recommended that the current monetary policy in South Africa should be maintained.
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The role of export diversification on economic growth in South Africa: 1980 - 2010
- Authors: Mudenda, Caroline
- Date: 2012
- Subjects: Economic development -- South Africa , International trade , Exports -- South Africa , Capital movements -- South Africa , Human capital -- South Africa , Free trade -- South Africa , Foreign exchange -- South Africa , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11463 , http://hdl.handle.net/10353/d1007044 , Economic development -- South Africa , International trade , Exports -- South Africa , Capital movements -- South Africa , Human capital -- South Africa , Free trade -- South Africa , Foreign exchange -- South Africa , South Africa -- Economic conditions
- Description: This study examined the role of export diversification on economic growth in South Africa. The study used annual time series data for the period covering 1980 to 2010 and employed a Vector Error Correction Model to determine the effects of export diversification and possible factors that affect it on economic growth. Possible factors that affect export diversification considered as independent variables in this study include gross capital formation, human capital, real effective exchange rate and trade openness. Results of the study reveal that export diversification and trade openness are positively related to economic growth while real effective exchange rate, capital formation and human capital have negative long run relationships with economic growth. The study recommended the continual implementation of trade liberalisation by the South African government. The South African government is also encouraged to promote the production of a diversified export basket through subsidisation, promotion of innovation and production of new products.
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- Authors: Mudenda, Caroline
- Date: 2012
- Subjects: Economic development -- South Africa , International trade , Exports -- South Africa , Capital movements -- South Africa , Human capital -- South Africa , Free trade -- South Africa , Foreign exchange -- South Africa , South Africa -- Economic conditions
- Language: English
- Type: Thesis , Masters , M Com
- Identifier: vital:11463 , http://hdl.handle.net/10353/d1007044 , Economic development -- South Africa , International trade , Exports -- South Africa , Capital movements -- South Africa , Human capital -- South Africa , Free trade -- South Africa , Foreign exchange -- South Africa , South Africa -- Economic conditions
- Description: This study examined the role of export diversification on economic growth in South Africa. The study used annual time series data for the period covering 1980 to 2010 and employed a Vector Error Correction Model to determine the effects of export diversification and possible factors that affect it on economic growth. Possible factors that affect export diversification considered as independent variables in this study include gross capital formation, human capital, real effective exchange rate and trade openness. Results of the study reveal that export diversification and trade openness are positively related to economic growth while real effective exchange rate, capital formation and human capital have negative long run relationships with economic growth. The study recommended the continual implementation of trade liberalisation by the South African government. The South African government is also encouraged to promote the production of a diversified export basket through subsidisation, promotion of innovation and production of new products.
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