Gross domestic product (GDP) is one of the most important economic performance indicators for any country that is closely watched by governments, businesses and financial communities. GDP often influences economic decisions and policy-making. These decisions are however often based on preliminary initial announcements by statistical agencies. The preliminary estimates are then revised as more comprehensive information becomes available. Therefore, it is important to ensure that the initial GDP announcements are unbiased, efficient and can be relied on. This study focuses on seasonally adjusted and annualised (qq) growth rates at constant prices for the following national accounts aggregates: GDP, gross domestic expenditure (GDE), final consumption expenditure by households and general government, gross fixed capital formation (GFCF), Exports and imports of goods and services, gross national income (GNI) and disposable income of households. The research methodology used is based on descriptive statistics and Ordinary Least Squares (OLS) regression estimations. The results of the study indicate that little confidence should be attributed to interpretations of the initially announced estimates for GDP, GDE, final consumption expenditure by households, GNI and disposable income by households. The study found evidence that suggests that the initial announcements are biased and inefficient. This implies that the initial announcements contain measurement errors that could be eliminated in order to become a better forecast of the final or true value. This further suggests a lack of expected reliability of existing and future initial announcements of the estimates. For short-term analysis the users of GDP data are encouraged to focus on different measures. It is also recommended that the statistical agents producing South Africa’s national accounts aggregates improve their statistical compilation processes. The agencies are also encouraged to conduct periodic revisions studies and make these available to the users.

M.Com. (Economic Development and Policy Issues) / There is an observable correlation, over time, between domestic savings rates and GDP growth rates: countries with relatively high savings rates over time also enjoying comparably high GDP growth rates. Aggregate saving in South Africa has been in decline and, currently, is at a historic low. Unflattering comparisons between South Africa and faster-growing emerging market economies have led to suggestions that South Africa's low domestic savings rate poses a constraint on the country's ability to grow faster. While the literature, both international and domestic, is relatively rich in studies on the determinants of foreign direct investment as well as the determinants of savings, none of the work done on South Africa has made use of disaggregated savings data to understand whether there is an observable difference in the marginal propensity to save of these economic sectors. In order to successfully raise the level of saving, much more focus needs to be applied to whether there is a difference in the relationship between growth and the components of aggregate saving i.e. which „source‟ of saving if any would yield the greatest impact on GDP and therefore should be encouraged from a policy point of view. The results of the econometric analysis demonstrate that the greatest responsiveness of savings to GDP growth occurs amongst corporates. Since corporates have a choice between retaining earnings and distributing earning as dividends (thus increasing household income) it is clear that tax-rates are an important lever through which government can encourage savings. In essence, a greater level of savings may be achievable if corporates are encouraged to retain earnings, rather than distribute these as dividends to the household sector which has exhibited a relatively weak propensity to save.

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.

This study is about whether the money supply in South Africa under a monetary policy regime of inflation‐targeting is exogenously or endogenously determined. The proposition of an exogenous money supply has been offered by monetarists, where the Central Bank determines the quantity of money supplied to the economy and this has a causal influence on income and credit extension. The endogenous money theory is a post‐Keynesian proposition whereby the money creation is determined by banks adjusting their responses to demands for credit‐money from economic agents. The data analysis is from 2000Q1 to 2010Q4 and entails the use of the variables monetary base (MB), domestic credit extension (DCE), M3, and gross national product (GDP). All variables are logged. The empirical tests conducted start with the Augmented Dickey‐Fuller unit root test to determine the variables order of integration. Johansen cointegration tests are done followed by Vector Error‐Correction Models (VECMs) and Granger causality tests to determine whether there is unidirectional or bidirectional causality between variables over the long and short‐run. Based on the results of the testing it was discovered that over the inflation‐targeting regime money supply in South Africa was endogenously determined. Furthermore, the data best supports the Accommodationist analysis of endogenous money as opposed to that of Structuralism and Liquidity Preference / Adobe Acrobat 9.53 Paper Capture Plug-in

This paper examines the impact of the recent global financial crisis on economic growth in developing economies and South Africa in particular. It explores whether the events experienced by developing countries conform to what would be anticipated from economic theory. This is done by firstly comparing country growth forecasts for 2012 captured in 2008 at the beginning of the crisis to actual 2012 GDP growth data. Secondly, panel data analysis is used to investigate three important transmission channels, namely those of Trade, Capital Flows and Exchange Rates for 25 developing economies. The results suggest that economic forecasters in 2008 on average overestimated GDP growth for 2012 by -21.6 percent (excluding Venezuela). The only important transmission channel identified using Trend analysis to explain this negative impact on growth was capital flows. However when using Panel regression analysis all three channels were found to explain the economic impact of the crisis on GDP growth for developing countries, conforming to economic theory. It was discovered that, contrary to what was initially expected, portfolio inflows actually increased for most developing countries during the crisis. This possibly can be explained by the impact of quantitative easing in the USA. South Africa was found to have been negatively impacted by the global financial crisis, but to a lesser extent when compared to most other developing countries. The findings are important for global investors looking for new investment opportunities. The extent to which individual economies are “decoupled” from developed economies’ performance provides possible opportunities for diversifying risk through a geographic spread of investor portfolios.

The measurement of economic performance and social development has become increasingly important as societies have evolved and become more complex. At present nations do not only seek to improve economic performance but are also compelled to improve social development through improvements in socially and environmentally sustainable initiatives. Traditional measures such as Gross Domestic Product (GDP) which is derived from United Nations’ System of National Accounts (SNA) have been criticised given the inability to adequately account for these social and environmental aspects of social development. Given these perceived deficiencies in the conventional measures, several alternative objective measures have been proposed in an attempt to address these shortcomings. Therefore the primary aim of this study is to analyse, via a literature survey, these alternative objective measures of economic performance and social development. The alternative measures that constitute the survey are the Index of Sustainable Economic Welfare (ISEW), the Genuine Savings (GS), and the United Nations’ Human Development Index (HDI). Upon the completion of the literature survey, sustainable development theory is used to evaluate the extent to which the National Accounts and the alternative objective measures are consistent with Hicksian and Fisherian definitions of income and capital, which embody the concepts of sustainability and sustainable development. The evaluation reveals that the National Accounts neither conform to the Hicksian nor the Fisherian definitions of income, thus could not be viewed as a measure of sustainable income. It is found that the ISEW is consistent with the Fisherian definition of income and is also a partial indicator of sustainable development. The evaluation of the GS measure reveals that it is consistent with the Hicksian definition but not the Fisherian definition. In terms of overall sustainability, it is argued that GS is a partial measure of weak sustainability. The HDI is similar to the National Accounts, in that it is neither consistent with the Hicksian nor the Fisherian definitions of income and is also not a measure of sustainability. In summary, the study demonstrates that despite GDP's shortcomings as a measure of economic performance and social development, currently, there is no alternative approach which simultaneously addresses every flaw in GDP. However, all the alternatives yield a much better approximation of social development than GDP.

The measurement of economic performance and social development has become increasingly important as societies have evolved and become more complex. At present nations do not only seek to improve economic performance but are also compelled to improve social development through improvements in socially and environmentally sustainable initiatives. Traditional measures such as Gross Domestic Product (GDP) which is derived from United Nations’ System of National Accounts (SNA) have been criticised given the inability to adequately account for these social and environmental aspects of social development. Given these perceived deficiencies in the conventional measures, several alternative objective measures have been proposed in an attempt to address these shortcomings. Therefore the primary aim of this study is to analyse, via a literature survey, these alternative objective measures of economic performance and social development. The alternative measures that constitute the survey are the Index of Sustainable Economic Welfare (ISEW), the Genuine Savings (GS), and the United Nations’ Human Development Index (HDI). Upon the completion of the literature survey, sustainable development theory is used to evaluate the extent to which the National Accounts and the alternative objective measures are consistent with Hicksian and Fisherian definitions of income and capital, which embody the concepts of sustainability and sustainable development. The evaluation reveals that the National Accounts neither conform to the Hicksian nor the Fisherian definitions of income, thus could not be viewed as a measure of sustainable income. It is found that the ISEW is consistent with the Fisherian definition of income and is also a partial indicator of sustainable development. The evaluation of the GS measure reveals that it is consistent with the Hicksian definition but not the Fisherian definition. In terms of overall sustainability, it is argued that GS is a partial measure of weak sustainability. The HDI is similar to the National Accounts, in that it is neither consistent with the Hicksian nor the Fisherian definitions of income and is also not a measure of sustainability. In summary, the study demonstrates that despite GDP's shortcomings as a measure of economic performance and social development, currently, there is no alternative approach which simultaneously addresses every flaw in GDP. However, all the alternatives yield a much better approximation of social development than GDP.