The purpose of this study is twofold. Firstly, business cycle theories have been developed as early as 1911 (Shumpeter). These theories are well researched and well documented, and all of these theories concentrate on the real sector. South Africa is an emerging market and since 1994 the country has liberalized its market, a process that holds advantages and disadvantages. This emerging market status as well as the relative size of imports and exports to GDP in South Africa, makes the country very vulnerable to changes in the world economy. Examples of this are the contagion from Asia in 1997, the Russian crisis in 1998, and the impact of September 11 in the US on the South African economy. Business cycles also have changed over the years; they are less volatile and more synchronized over the world and the financial markets play a more important role. This is another reason why it might be useful to identify a financial cycle and investigate its relationship with the real cycle. The SARB (South African Reserve Bank) has some financial indicators in its leading indicator but the latter is mainly driven by real indicators. The financial cycle identified uses the equity market, the capital market and the domestic financial market as components. All of the determinants of these three components are available at a higher frequency than the GDP growth (our proxy for the business cycle); therefore the financial cycle can be used as a leading indicator incorporating international and domestic financial events. Secondly, an ongoing debate in business cycle research is the question of a stable economy (business cycle) influenced by exogenous shocks or an unstable economy with an endogenous business cycle (Classical vs. Keynesian view). This issue will be addressed by modelling the business cycle with a linear as well as a non-linear model. Linear models are usually used to demonstrate exogenous shocks on the business cycle, whereas nonlinear models have more of an endogenous assumption regarding the business cycle. Non-linear models learn over time and adjust to the new level of peaks and troughs and can therefore predict turning points more accurately. This suggests that business cycles have changed since 1960: they became less volatile, more synchronized across the world and the amplitude of peaks and troughs is lower. Because of these characteristics it would be useful to fit a non-linear model to the business cycle. However, exogenous shocks cannot be totally ignored – especially in an emerging market such as South Africa. The STAR (smooth transition autoregressive) model makes room for a linear and a non-linear component, and can over time determine if there is only a linear or non-linear component or sometimes both. The results of this study support the structural or institutional view. They believe economic fluctuations are caused by various structural or institutional changes. Adherents to this view do not believe that the market system is inherently stable or systematically unstable (Classical vs. Keynesian view). They focus on structural changes and unpredictable events. They do not have set ideas on economic policy. According to them the appropriate policy will vary from time to time as circumstances change. / Prof. L. Greyling

D.Com. (Economics) / Please refer to full text to view abstract

M.Com. (Economics) / Please refer to full text to view abstract

M.A. / The purpose of this study is to examine structural unemployment in the post apartheid South Africa and propose possible policy options to reduce structural unemployment in the new South Africa. In coming to some possible solutions, it is necessary to consider the South African labour market before and after the elections in 1994 when the Apartheid struggle was ended in a formal and legitimate manner. It is also necessary to research the dilemma of structural unemployment in South Africa and search for possible solutions to the problem by looking at current government policy and other views from the different stakeholders in the economy. It is only through this process that one can start coming to some kind of conclusion as to possible measures to reduce structural unemployment in the post-Apartheid South Africa. This study should by no means be considered as the answer to the problem of unemployment in South Africa, but only acts as an introductory study into the problem of rising structural unemployment in the country.

M.Comm. (Financial Economics) / This study provides an assessment of the comparative effectiveness of four methods of estimating the optimal hedge ratio in the South African equity and futures markets. This study bases the effectiveness of hedging on volatility reduction and minimisation of the coefficient of variation of hedged returns as well as the risk-aversion based on utility maximisation. The empirical analysis shows that the static single equation method estimated by ordinary least squares is the most effective over daily hedging periods. However, the vector error-correction method and multivariate GARCH methods are most effective over weekly and monthly hedging periods. Vector autoregression method is the least effective method over all hedging periods.

M.Com. (Economics) / The theoretical principle of the Report is by no means clearly outlined by the Commission although the Report states that it was compiled by experts. The study tried to identify the position of the Report within the broad spectrum of beliefs on monetary policy. For the purpose of analysis, the Monetaristic School, the Keynesian School as well as the ultra free market approach of the Austrian School of Economists were looked at specifically. The study yielded interesting results such as: * The disparagement of the Report of a fixed money supply rule and interest rates which are not allowed to find their own levels at all times, forms an unbridgeable gap between the monetarists and the Commission. Of the most important incidences between the two viewpoints is the fact that inflation is regarded as a monetary phenomenon and that direct control measures are rejected. * The fact that the Report recommends that the money supply be controlled from the demand side and that we therefore, at least in the short term, have to do with an endogenous money supply which is determined by the demand therefore, supports the view of the Keynesian School. * No definite incidences between the Report and the ultra free market approach could be identified. * A more functional approach implies that discretionary decision making power of the monetary authorities ought to be scaled down and altered as the approach of the Commission with regard to control over the money supply is being questioned. The reason for this is that behavourial variables that the Commission tries to influence are not known variables. * A money supply rule in South Africa can presently not be applied effectively as a result of the fact that all markets in the economy are not fully competitive. * It is recommended that more freedom can be g,ranted to the private banking sector in the form of the denationalization of money. It can for example take place through extensive scaling down in discount rendering by the Reserve Bank. Banks are consequently forced to keep their own reserves and to create money on the basis of their current reserves. That alone forms a control mechanism over the creation of money because of the fact that competition between banks will ensure that no bank would like its currency to depreciate against the currencies of the other banks as a result of excessive money creation.

LL.M. / Please refer to full text to view abstract

M.Com. (Economics) / This study looked into the possible presence of structural inflation in South Africa. The South African rate of inflation has, by the time this study was undertaken, showed resistance to reduce in the face of several years of demand management policies. It was this resistance that led to the idea that the South African inflation rate might be the result of several structural factors in the economy. The study was done in three separate stages. In the first, a study of the conventional theories of inflation, the demand-pull and cost push theories, was done. The main objective was to establish whether inflation could be controlled by the medicine these theories prescribed. In section two, the different schools of thought as regards the structural approach to inflation were analyzed. The structuralist school, developed during the late 1950s, described inflation as the result of productivity discrepancies mainly between the agricultural and industrial sectors. The structural school, which developed during the early 1970s has two variations. The first, the Scandinavian variant, ascribes inflation to the existing productivity gap between the international competing sectors and the domestic sectors, whilst no corresponding gap in salaries between the relevant sectors exists. The second variant designates inflation to the gap existing between the labour productivity in the public and private sectors. Here again, no such salary gap exists between the sectors. The last structural inflation school of thought discussed was the one prevailing in the USA. This school saw inflation as the result of the unproductive use of capital and labour when measured against the incomes generated by the same factors of production. In section three of the study, the abovementioned theories of structural inflation were empirically applied in the South African context. In all cases very definite pointers, indicating the applicability ·of these theories in the South African situation were found. In all cases two main sector groups were constructed; each consisted as the sum of the weighted productivity of wages of the sectors belonging to that sector group i.e. internationally or domestically competitive and public or private competing groups. The constructed series for labour productivity and wages and salaries for the different sector groups were then compared.

D.Com. (Economics) / The objective in writing this thesis was to investigate the capital structure of South African manufacturing industry and the implications of this structure for policy formation relating to industry. The capital stock of the 27 branches of the manufacturing industry were calculated by means of the perpetual inventory method based on the following assumptions: capital formation excludes transactions relating to inventory, durable consumer goods and financial assets; transactions in land and other fixed assets were taken into consideration; leasing was regarded as investment and capitalised at ten times the annual base payment in respect of land and buildings and five times in respect of machinery and transport equipment; and transfer costs on property and existing buildings were treated as part of fixed investment. Cencuses compiled by the Department of Statistics were the main source of information in the calculation of investment. Depreciation was based on the straight-line-method. Price indices from various sources, including those compiled by the Reserve Bank, were used. The economic life of fixed assets for the various branches of the manufacturing industry was chosen after consultation with experts in the various industries and an analysis of information obtained by questionnaire. It was found that the real capital stock of manufacturing industry increased by 1 247 per cent during the period 1945-1975, i.e. at an average annual rate of 8,8 per cent. The basic iron and steel industry with a capital stock (valued at 1975 replacement values) or R2 478,4 million in 1975 was the largest absolute consumer of capital followed by the food industry ...

M.Com. (Economics) / Please refer to full text to view abstract