Dissertation (PhD)--Stellenbosch University, 2003. / ENGLISH ABSTRACT: A number of themes run through this dissertation, the first of which is the importance of money
in facilitating decentralised decision making by lowering transaction costs and by contributing to
the definition and maintenance of property rights. A second (and more melancholy) theme is that
government control of money has often been poor, and systematically so since the War. This
leads to a third theme, the combined force of economic theory and central bank practice of the
last quarter of a century or so has led to clearer limits to the discretionary power of government
in the management of money. These limits are increasingly expressed as contingent rules
containing explicit targets for monetary policy, for example an inflation target.
The objective of this thesis is to evaluate inflation targeting both normatively and positively as a
framework for monetary policy. A set of criteria from the New Institutional Economics literature
is used to evaluate the extent to which inflation targeting captures the lessons from the three
themes mentioned above, in both normative and positive dimensions. The practical importance
of the thesis is in the application of this institutional evaluation to the inflation the targeting
regime of recent vintage in South Africa, which leads to a number of policy recommendations.
Part I consists of three chapters of which the first two are mainly abstract and concerned with
the theory of the New Institutional Economics. The third chapter has a historical character and
considers the history of and recent trends in monetary policy. These trends are consistent with
adopting an inflation target as a framework for monetary policy.
The second part of the thesis starts with a theoretical consideration of monetary policy rules in
chapter 4, and is followed by a discussion of one such rule, inflation targeting, in chapter 5. This
discussion starts with the theory of inflation targeting, but proceeds to details of actual inflation
targeting central banks, with special reference the South African Reserve Bank (SARB). The
history of anti-cyclical monetary in South Africa is also considered empirically to determine
whether inflation targeting would represent an important new direction on this issue.
Chapter 6 follows with a literature review of the empirical record of the first decade of inflation
targeting internationally. The seventh chapter is the core of the thesis and provides the
institutional evaluation of inflation targeting. This evaluation is applied to the present inflation
targeting regime in South Africa, and leads to recommended policy reforms. These policy reforms are mapped on a two-dimensional chart that indicates their priority and the expected
cost of the associated institutional reform. Additionally a new econometric methodology is used
in chapter 7 to gauge the contribution of monetary policy to the more stable economy of recent
years.
In part 3 the focus of the thesis turns to certain political economy considerations that arise from
the independence of the central banks (as is typical for inflation targeting central banks). Chapter
8 considers the issue of central bank independence and is followed by an application of
constitutional economics to inflation targeting in chapter 9. Whereas the bulk of the dissertation
is concerned with the positive evaluation of inflation targeting, chapter 9 attempts a normative
evaluation using the Pareto-Wicksell criterion. Both the positive and normative assessments in
this thesis support the case for inflation targeting as a framework for monetary policy, / AFRIKAANSE OPSOMMING: Die doel van hierdie proefskrif is 'n institusionele evaluering van inflasieteikening as raamwerk
vir monetêre beleid. Vir hierdie doel is 'n stel kriteria saamgestel uit die literatuur van die Nuwe
Institusionele Ekonomie met die oog op 'n positiewe en 'n normatiewe evaluering van
inflasieteikening as 'n raamwerk vir monetêre beleid. Die praktiese waarde van die tesis lê in die
stel institusionele hervormings wat voorgestel word om die stelsel van inflasieteikening in Suid-
Afrika meer doeltreffend en normatief meer gewens te maak.
Etlike temas loop deur die proefskrif, maar veral drie verdien vermelding in die opsomming,
naamlik: eerstens, die belangrikheid van die monetêre stelsel om gedesentraliseerde besluitneming
te vergemaklik en as bydraende faktor in die vestiging van eiendomsreg. Tweedens, hoewel
moderne owerhede tipies 'n monopolie op die plaaslike geldeenheid bestuur, het die monetêre
bestuur in die moderne tydgewrig (veral sdert WOII) veel te wense oorgelaat. Hierdie
wanbestuur was boonop telkens sistematies. Derdens, beide teoretiese ontwikkelings en die
praktyk van sentrale bankwese het die afgelope kwarteeu aanleiding gegee tot 'n terugrol van die
regering se rol in monetêre beleid en die toenemende gebruik van sistematiese beleidsreëls as
raamwerk vir monetêre beleid.
Die eerste deel van die proefskrif beskou die teorie van die Nuwe Institusionele Ekonomie in
hoofstukke 1 en 2. Die derde hoofstuk is histories van aard en beskou die geskiedenis van
moderne monetêre beleid en die tendense wat daaruit afgelei kan word.
Afdeling twee fokus meer nougeset op inflasieteikens en begin met die teorie van beleidsreëls in
hoofstuk 4. Die vyfde hoofstuk volg met 'n interpretasie van inflasieteikens as een van die
sogenaamde terugvoerreëls vir monetêre beleid wat sedert die laat sewentigerjare ontwikkel is en
sedertdien gewild geword het. 'n Toenemende aantal ontwikkelde- en ontwikkelende-lande het
gedurende die afgelope dekade (en langer) inflasieteikens as raamwerk vir monetêre beleid
aangeneem. Hoofstuk ses evalueer die empiriese rekord van hierdie kort geskiedenis. Die
sewende hoofstuk is die kern van die tesis en bevat die institusionele evaluering van die
inflasieteikens aan die hand van die kriteria saamgestel in hoofstuk 1, met spesifieke toepassing
op Suid-Afrika. 'n Nuwe ekonometriese tegniek word ook in hoofstuk 7 gebruik om die bydrae
van monetêre beleid tot die meer stabiele ekonome van onlangse tydgewrig te kwantifiseer. Die netelige institusionele kwessie van onafhanklik sentrale banke word rue 111 hoofstuk 7
bespreek rue, maar staan oor tot deel drie van die proefskrif waar die politieke-ekonomie van
inflasietekens bespreek word. Hoofstuk 8 handel dan oor onafhanklike sentrale banke, met
toepassing op die SARB, terwyl hoofstuk 9 'n toepassing is van die konstiutionele ekonomie op
inflasieteikening. Hoofstukke 8 en 9 bied derhalwe verdere positiewe evaluering van die
instrument-onafhanklike SARB onder inflasieteikens, asook 'n normatiewe evaluering van
inflasieteikens aan die hand van die Pareto-Wicks ell kriteria wat uit hoofstuk 2 spruit. Beide die
normatiewe en positiewe evaluerings ondersteun die saak ten gunste van inflasieteikens as
raamwerk vir monetêre beleid.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/53268 |
| Date | 12 1900 |
| Creators | Du Plessis, Stan,1972- |
| Contributors | Terreblanche, S. J., Smit, B. W., Stellenbosch University. Faculty of Economic and Management Sciences . Dept. of Economics. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | 379 p. |
| Rights | Stellenbosch University |
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