No abstract available. / Thesis (M.Comm.)-University of Natal, Pietermaritzburg, 1998.

Introduction: In recent years there has been a marked upsurge in the output of literature dealing with the demand for money, but with the exception of the North American Continent, empirical research has lagged distressingly far behind the voluminous output of theory. This dearth of empirical results has had a restrictive influence. Since any of the controversial points which are being disputed by theoreticians can only be resolved by recourse to empirical methods. The restriction of empirical research to the North American Continent has further meant that the various points under dispute have had only a limited qualification and consequently monetary theorists have had no indication as to the universalizability of their conclusions. There is thus a great need for empirical studies in other countries so that the validity of the rival theories can be tested under different conditions. It was with these thoughts in mind that the present study was undertaken. Its objectives are strictly national and no pretense of strict international comparability is made. Further, great care has been taken to avoid the pitfall so beloved of econometricians, the fallacy of reduction wherein strictly limited results are uncritically universalized. Thus no attempt has been made to draw conclusions which will have universal validity. The theoretically vital points which are going to be examined in the light of South African experience are: 1. The feasibility of distinguishing idle from active balances, and if this proves possible, the determination of the wealth and interest elasticities of these balances; 2. Dropping the explicit distinction between idle and active balances to (a) determine the role of interest rates, (b) determine the appropriate constraint on the demand function, (c) determine what effect different definitions of money have on (a) and (b); 3. To examine the stability of the demand function over time. Truth is, of course, many-sided and any uniform presentation can only aspire to present a one-sided picture, just like a photograph cannot hope to do justice to the full grandeur of nature, merely presenting a one-dimensional representation of a many dimensioned object. In spite of this restriction which is inherent in all econometrical studies, this one-sided picture seems to be justified in view of the lack of any unified and coherent treatment of the demand for money in South Africa.

A stable money demand function plays a vital role in the analysis of macroeconomics, especially in the planning and implementation of monetary policy. With the use of cointegration and error correction model estimates, this study examines the existence of a stable long-run relationship between real money demand (RM2) and its explanatory variables, in South Africa, for the period 1990-2007. The explanatory variables this study uses are selected on the basis of different monetary theories, including the Keynesian, Classical and Friedman‟s modern quantity theory of money. Based on these theories, the explanatory variables this thesis uses are real income, an interest rate, the inflation rate and the exchange rate. All variables have the correct signs, as expected from economic theory, except the inflation rate. Thus real income and inflation have positive coefficients, while the interest rate and exchange rate coefficients are negative. The results from unit root tests suggest that real income, interest rate and the inflation rate are found to be stationary, while RM2 and the exchange rate are non-stationary. Results from the Engle-Granger test suggest that RM2 and its all explanatory variables are cointegrated. Hence, we find a long-run equilibrium relationship between the real quantity of money demanded and four broadly defined macroeconomic components: real income, an interest rate, the inflation rate and the exchange rate in South Africa. Overall, the study finds that the coefficient of the equilibrium error term is negative, as expected, and significantly different from zero, implying that 0.20 of the discrepancy between money demand and its explanatory variables is eliminated in the following quarter. This evidence suggests that the speed of adjustment for money demand implies the money market in South Africa needs about four quarters to re-adjust to equilibrium. This observation agrees with the public statements of the South African Reserve Bank. Whether this will hold after November 2009 is the obvious subject of future research. / Thesis (M.Comm.) - University of KwaZulu-Natal, Pietermaritzburg, 2009.

<p>In South Africa, as in many developing countries, most households are poor and do not save, as a result of which they do not acquire any positive net worth and which also constrains access to formal means of finance. South Africa is a consuming nation, with increasing ratios of household consumption resulting in dissaving and often unsustainable levels of household debt, which is also stimulated by the current lower level of interest rates. This situation is worse amongst poorhouseholds who also often experience financial shocks, for instance because of the death of family membersas a result of HIV/AIDS. This report provided an overview of household saving in South Africa for the period 1983 to 2003. It identified the main factors responsible for the lack of a commitment to saving which are particularly relevant in the case of poor households.</p>

<p>In South Africa, as in many developing countries, most households are poor and do not save, as a result of which they do not acquire any positive net worth and which also constrains access to formal means of finance. South Africa is a consuming nation, with increasing ratios of household consumption resulting in dissaving and often unsustainable levels of household debt, which is also stimulated by the current lower level of interest rates. This situation is worse amongst poorhouseholds who also often experience financial shocks, for instance because of the death of family membersas a result of HIV/AIDS. This report provided an overview of household saving in South Africa for the period 1983 to 2003. It identified the main factors responsible for the lack of a commitment to saving which are particularly relevant in the case of poor households.</p>

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

Magister Economicae - MEcon / In South Africa, as in many developing countries, most households are poor and do not save, as a result of which they do not acquire any positive net worth and which also constrains access to formal means of finance. South Africa is a consuming nation, with increasing ratios of household consumption resulting in dissaving and often unsustainable levels of household debt, which is also stimulated by the current lower level of interest rates. This situation is worse amongst poorhouseholds who also often experience financial shocks, for instance because of the death of family membersas a result of HIV/AIDS. This report provided an overview of household saving in South Africa for the period 1983 to 2003. It identified the main factors responsible for the lack of a commitment to saving which are particularly relevant in the case of poor households. / South Africa

This research provides an historical, theoretical and practical appraisal of exogenous and endogenous money and money creation, with South Africa as the focus of the practical investigation. Monetary theory of recent decades can be categorised as belonging to one of two distinct paradigms: mainstream (neoclassical) or post Keynesian. The mainstream (orthodox) view presents a Euclidian or Cartesian, ergodic, deductive, and axiomatic theoretical interpretation of the world. This is perpetuated through the continued, and inaccurate, depiction in academia of exogenous money creation, the money multiplier concept, asset transformation by banks, imposed alterations to the money stock by central banks and long-run closed system equilibrium models (and associated homogeneity, and long term behavioural assumptions). In the real world, economic agents, structures, institutions and their interrelations are perpetually evolving. The post Keynesian paradigm provides the theoretical framework within which to understand such a world. Unfortunately the necessity for a multiplicity of methods and methodology makes it a paradigm that is currently prohibitively complex, preventing simple exposition. Money creation should, both historically, and according to the analysis conducted, be defined according to the actual source of change in the money stock, that is, credit extension. In a nonergodic world, changes in the stock of money take on a causal role with regard the initiation of productive processes, and thus influence future economic conditions. The simple, although powerful, technique of balance sheet analysis conducted herein provides a detailed method of identification of causal changes in money stock. Within the context of the institutional and structural environment, it clearly demonstrates the residual nature of money m modern economies. This research serves to emphasise the importance of monetary matters for economic management, as well as the important difference between the money creation process and the residual deposit securities. It serves also to discourage the perpetuation of fallacies of money creation, and capabilities of monetary authorities. In South Africa, as in most countries, the central bank can influence the conditions under which borrowers and banks mutually create money, but do not themselves create or distribute money beyond the facilitation of credit extension by banks

M.Com. (Business Management) / Payment instruments are commodities which are very common in our everyday life. The research sets out to determine which payment instrument is the payment instrument of choice by consumers at point of sale when paying for goods at a retail store in Gauteng, Pretoria. The conceptual model makes use of attributes associated with payment instruments to determine which payment instrument is more preferable by consumers at pay point. Empirical results shows a strong support for card as payment instrument of choice whilst secondary scanner data offers rich raw data with results showing strong support for cash as payment instrument.

This thesis presents a theoretical analysis of developments in the South African monetary banking sector and money market. In the first section, evolution of the political, social and economic environments over the past few decades are discussed to provide the reader with an idea of some factors responsible for the underdeveloped nature of this market. It has been argued that the domestic political and economic landscape is relatively stable. Nevertheless, factors such as Zimbabwe’s political and ensuing economic turmoil, coupled with numerous financial crises in other developing nations have had negative consequences on domestic financial market development and economic growth. The current state of monetary policy is also analysed, within the economic environment, and various policy considerations have been put forth concerning the inflation targeting policy. The thesis then goes on to scrutinise the statutory and institutional environments within which the monetary banking institutions operate. Recent changes in the regulations governing the operations of these institutions are identified, together with the consequences of such laws on banking institutions and possible amendments have been suggested. In particular, a system of Asset Based Reserve Requirements (ABRR) has been recommended, in place of the current cash reserve requirement, to ensure regulators create a level playing field in the financial sector. The system can also provide authorities with the necessary control required to direct funds to the most desirable sectors of the economy. Development of the interbank market and the effect of reduced banking competition on the efficacy of the South African Reserve Bank’s refinancing operations and inflation targeting policy are also considered. Finally, the thesis analyses some effects of financial development on the South African economy, and whether it is in the best interests of the country to pursue financial reforms with such vigour. While financial development may bring South Africa closer to international standards of best practice, the timing and extent of the reforms will be critical to guarantee success.