This thesis examines the relationship of monetary policy and investment in a theoretical framework in which monetary and real economic forces are intrinsically interlinked. The full shift from a money, real dichotomy in historical economic thought to the notion of money being an essential determinant of economic outcomes is traced to the work of Keynes, partly in the Treatise (1930), but more completely in the General Theory (1936). The treatment of monetary forces in economic growth models is examined. It is found that the money, investment relationship, with close money, real interaction, is appropriately pursued in the approach to monetary theory adopted by those who could broadly be characterised as Post Keynesian. The operation of monetary forces through the banking system is examined using this theoretical backdrop. A symbolic model is developed of the influence channels implied by the theoretical analysis, using the South African monetary system as the specific focus. The symbolic model is expressed in a form which enables empirical examination. South African data are compiled and used to determine the nature and statistical significance of hypothesised relationships. The implications of the theoretical analysis and empirical examination are drawn out both for monetary theory within the Post Keynesian mould, and for the conduct of monetary policy, in South Africa in particular. / Economics / D. Litt. et Phil. (Economics)

The theoretical foundations of the Post Keynesian view of money are examined, including the nature of money, role of uncertainty and time, and the use of equilibrium concepts. This provides a backdrop against which the Post Keynesian analysis of interest rates, investment behaviour: inflation and demand determination is presented in a framework of non-neutral money and Keynes' principle of effective demand. A model of the Post Keynesian theory of money is presented, with arguments as to why the IS/LM model of the neoclassical synthesis is considered deficient. The money supply endogeneity view is explored, together with Keynes' finance motive. The open economy case is considered, with emphasis on a small open economy. The monetary policy perspectives of the Post Keynesian camp are examined. The implications for South Africa are considered in respect of money supply targeting, interest rate policy, anti-inflation measures, public debt management, exchange rates and Reserve Bank objectives. / Economics / M.A. (Economics)

This thesis examines the relationship of monetary policy and investment in a theoretical framework in which monetary and real economic forces are intrinsically interlinked. The full shift from a money, real dichotomy in historical economic thought to the notion of money being an essential determinant of economic outcomes is traced to the work of Keynes, partly in the Treatise (1930), but more completely in the General Theory (1936). The treatment of monetary forces in economic growth models is examined. It is found that the money, investment relationship, with close money, real interaction, is appropriately pursued in the approach to monetary theory adopted by those who could broadly be characterised as Post Keynesian. The operation of monetary forces through the banking system is examined using this theoretical backdrop. A symbolic model is developed of the influence channels implied by the theoretical analysis, using the South African monetary system as the specific focus. The symbolic model is expressed in a form which enables empirical examination. South African data are compiled and used to determine the nature and statistical significance of hypothesised relationships. The implications of the theoretical analysis and empirical examination are drawn out both for monetary theory within the Post Keynesian mould, and for the conduct of monetary policy, in South Africa in particular. / Economics / D. Litt. et Phil. (Economics)

The theoretical foundations of the Post Keynesian view of money are examined, including the nature of money, role of uncertainty and time, and the use of equilibrium concepts. This provides a backdrop against which the Post Keynesian analysis of interest rates, investment behaviour: inflation and demand determination is presented in a framework of non-neutral money and Keynes' principle of effective demand. A model of the Post Keynesian theory of money is presented, with arguments as to why the IS/LM model of the neoclassical synthesis is considered deficient. The money supply endogeneity view is explored, together with Keynes' finance motive. The open economy case is considered, with emphasis on a small open economy. The monetary policy perspectives of the Post Keynesian camp are examined. The implications for South Africa are considered in respect of money supply targeting, interest rate policy, anti-inflation measures, public debt management, exchange rates and Reserve Bank objectives. / Economics / M.A. (Economics)