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

This research attempts to empirically examine the bank-lending channel in monetary policy transmission in Rwanda, using quarterly data for the period 1996Q1 to 2011Q4. The responses of the loans supply, real output, prices, and deposits to monetary policy innovations were investigated in this research, using impulse response functions and variance decompositions obtained from a Vector Autoregressive model (VAR). Estimation results revealed that the bank lending channel in Rwanda is less effective. The findings suggest that although monetary policies working through interest rates have a significant effect on bank loans, loans appear to not influence the real output level. As in other developing economies, the financial sector in Rwanda is still weak. As a result of the absence of long- term investment, bank customers bear the risk associated with the poor quality of loans in addition to the risk associated with high and variable inflation. These are likely to hamper the monetary policy transmission mechanism.

This thesis investigated the role of monetary policy in Namibia for the period 1993 to 2011. It aims at achieving six objectives. First, it reviews the evolution of monetary policy in Namibia for the period 1980 to 2011. Second, it investigates the interest rate channel of the monetary policy transmission mechanism in Namibia. Third, it analyses the credit channel of the monetary policy transmission mechanism in Namibia. Fourth, it evaluates the exchange rate channel of the monetary policy transmission mechanism in Namibia. Fifth, it studies the money effect model in the context of the monetary policy transmission mechanism in Namibia. Sixth, it examines the exchange rate pass–through (ERPT) to domestic prices in Namibia. In order to achieve the objectives of the relative importance of the different channels of monetary policy transmission, a structural vector autoregressive model of the Namibian economy is constructed. Specifically the responses of the output and prices to monetary policy shocks for Namibia over the quarterly period 1993:Q1 to 2011:Q4 are investigated using impulse response functions and forecast variance error decompositions obtained from a structural vector autoregressive model (SVAR). The thesis also examined the exchange rate pass-through from exchange rate to domestic prices using both SVAR and the single equation error correction model (ECM). Estimation results on the different channels of monetary policy transmission mechanism showed that the interest rate channel and the credit channel are effective in transmitting monetary policy actions. The exchange rate channel is also operative but not effective. The money effect model confirms that inflation in Namibia is not a monetary phenomenon. The results of the pass-through relationship showed that there is an incomplete but high exchange rate pass-through from exchange rate to domestic prices.

The aim of the thesis is to evaluate the factors that influence the relationship between money supply and inflation and to determine how these factors show over time. The work is based on the current knowledge of the quantity theory of money based on the synthesis of monetarist and new keynesianism approach. The main starting point of this thesis is the fact that there is a widening of the gap between money supply growth and inflation. In the thesis were observed the factors that influence the money supply, velocity of money and inflation. These factors are for exapmle political decisions, greater concentration of wealth in society, uncertainty in financial markets and the possible impact of the shadow economy and the increasing importance of sharing economy. The result of this thesis was the finding that in case of no significant change in the current system, the widening of the gap between the money supply growth and inflation will continue.

This study analyzes how the financial crisis of 2008 compared to the Covid-19 pandemic affectedinflation, measured by the consumer price index, in Sweden. This study aims to give moreprofound knowledge of how two crises affect the consumer price index and therefore preventpotential future economic crises. Data from Statistics Sweden and Statistics Denmark was analyzed by using a quantitative methodto statistically investigate how different periods of crisis vary and their effect on the consumerprice index compared to non-crisis periods of the data. The study observes data from 2000 to2022. The financial crisis had its starting point on the housing market in the US, and the pandemic wascaused by the SARS-CoV-2 virus. Both crises have and may continue to affect the consumerprice index. Results from previous research are mostly aligned with the results and conclusion from this studyregarding how the financial crisis in 2008 and the Covid-19 pandemic affected the Swedishconsumer price index. In conclusion, both crises affected the consumer price index. During thefinancial crisis, it dropped, increased, and dropped again. Two peaks in the consumer price index,before and after the financial crisis, suppress the visual effect of the high peak at the beginningof the financial crisis. During Covid-19, the consumer price index increased largely, and the peakwas not reached during the period of the collected data.

This paper investigates, as its main question, the probable impact of nationalising the private shareholding of the South African Reserve Bank (SARB). A sub-question is first posed in order to answer the main question. The sub-question is: are the shareholders of the SARB the owners of the Bank and what are their rights and obligations? In a nationalisation scenario the rights and obligations of the shareholders will cease to exist. Therefore, it is essential first to determine all the rights and obligations of the shareholders when measuring the impact of nationalising the SARB private shareholding. The paper uses the A.M. Honoré legal test of ownership to determine whether the shareholders of a South African listed company and the SARB shareholders, can be viewed as the owners of the respective entities. That legal test indicated that the shareholders of a JSE- listed corporation satisfy very few of the legal incidents of ownership and the SARB shareholders satisfied none. Consequently, from a legal point of view, shareholders of the SARB are not its owners. By analysing, critically, the historic data concerning share price growth and share liquidity for the SARB, and what the possible expropriation compensation might be, this paper seeks to determine if profit is a ii motive for owning SARB shares. Profit was not found to be a motive for owning those shares. The motive of shareholders in owning SARB shares can potentially reveal undisclosed shareholder rights and obligations. The AGM of the SARB is also observed to determine if any undisclosed shareholder rights and obligations exist. No unusual rights and obligations were determined except a close relationship between the commercial bank shareholders and the SARB. The SARB shareholder rights and obligations are in accordance with the South African Reserve Bank Act and Regulations. After the sub-question is answered and a complete set of shareholder rights and obligations are determined, the operational, financial and corporate governance effect of nationalising the South African Reserve Bank is discussed. If it is assumed that the directors and Monetary Policy Committee (MPC) can continue with the same degree of autonomy, then nationalising the private shareholding of the SARB will have no significant financial, operational and corporate governance effect on the Bank. This paper suggests that the true motive for requesting the nationalisation of the SARB private shareholding, is the desire to nationalise the ability of commercial banks to create the nation’s money supply.

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A key issue in this paper is whether or not stock prices may be predicted based on information obtained by predicting money supply growth. Based on the evidence presented in this paper the conclusion is no. First, there is a strong contemporaneous correlation between money growth and stock price changes. There is little correlation with lagged money growth. Information regarding historical data on the money supply would not provide a means of forecasting stock prices. This information is already discounted in the price of the stock. Second, the evidence on expected and unexpected money growth shows a lack of significance in the expected variable coefficients. This is consistent with the rational expectations (efficient markets) theory that only unexpected changes will have an effect on stock prices. Further evidence is that generally only contemporaneous unexpected money growth is strongly significant. One way of analyzing an efficient markets-oriented model of money's affect on stock prices is a two-step approach which was used in this analysis. The first step was to develop a model to forecast money growth. The predicted values and residuals from the forecasting model were then used as proxies for expected and unexpected variables, respectively. In the second step, these variables then served as regressors to predict changes in the stock market price in a second equation. / Master of Arts

In tests performed for the period 1897 to 1958, Milton Friedman and David Meiselman found that income velocity of circulation of money was consistently more stable than the investment multiplier except during the early years of the Great Depression. This paper replicates their test for the period 1959 to 1986. The results for this later period are consistent with the Friedman-Meiselman findings. The stock of money remains the more stable and consistent influence on consumption; autonomous expenditures do not influence consumption during any sub-period studied. The money stock remains far more critical than autonomous expenditures in explaining movements in consumption. The replication consists of a series of regression equations for consumption expenditures as a function of the stock of money and of autonomous expenditures. Data in both nominal and real terms are used. Data are lagged five quarters to test the effect on consumption. / Master of Arts