Thesis (MBA)--Stellenbosch University, 2002. / ENGLISH ABSTRACT: Inflation has many negative effects and for this reason the South African Reserve Bank, like
central banks in most countries, is strongly opposed to inflation and uses its monetary policy to
combat it. This action is necessary for continued economic growth, prosperity and a fair
distribution of income and wealth. Low inflation and a stable financial environment are
important prerequisites for the achievement of these objectives on a long-term basis.
In order to combat inflation in South Africa it was announced in the Budget Speech on the 23
February 2000, that a policy of inflation targeting would be implemented in South Africa. The
objective is to bring inflation within the target band of three to six percent by the year 2002.
Inflation targeting has been successful in helping New Zealand, Canada, Israel, the United
Kingdom, Sweden, Australia and Spain achieve and maintain low rates of inflation. This does
not mean, however, that inflation targeting has been implemented without incurring costs in lost
output and employment, but there is no evidence that the adoption of inflation targets has
produced harmful effects to the real economy over the long-term. Instead, the low inflation rates
achieved in the inflation targeting countries have improved the prospects for sustainable longterm
growth.
However, inflation targeting is not appropriate for all countries. There are certain developing
countries that do not meet the basic requirements for adopting inflation targeting.
In this study the viability of implementing inflation targeting as a policy solution to combat
inflation in South Africa is examined. In order to determine this, focus is placed on the key
characteristics and features of inflation targeting. The reasons why countries have implemented
inflation targeting are viewed and the prerequisites that must be met before inflation targeting
can be implemented are discussed. The advantages and disadvantages of this approach are also
highlighted.
Furthermore, focus is placed on how inflation targeting has been implemented in some of the
advanced economies in order to determine whether it can be successfully implemented in developing countries, and if so, in which developing countries. Finally equipped with an
.understanding of the theoretical aspects of inflation targeting and drawing from the lessons of the
international experiences, focus is placed on how viable it is to implement inflation targeting in
South Africa. / AFRIKAANSE OPSOMMING: Wêreldwyd neem Sentrale Banke van ontwikkelende lande, aktiewe stappe in die bekamping van
inflasie. Die Suid Afrikaanse Reserwe Bank, net soos ander Sentrale Banke is ook gekant teen
inflasie en maak gebruik van hulle monetêre beleid vir die bekamping van inflasie. Bekamping
van inflasie is van kardinale belang om voortgesette ekonomiese groei, welvaart en 'n regverdige
verspreiding van inkomste en rykdom te verseker. Lae inflasie en 'n stabiele finansiële
omgewing is belangrike voorvereistes om hierdie finansiële doelwitte in die langtermyn te
bereik.
Ten einde inflasie in Suid Afrika te bekamp, het die Minister van Finansies in sy begrotingsrede
van 23 Februarie 2000, aangekondig dat Suid Afrika 'n beleid van inflasie bekamping gaan
implementeer. Die doelwit van so beleid sou wees om inflasie binne 'n drie tot ses persent
teikenband te beperk teen die jaar 2002.
Inflasie bekamping was suksesvol in die bekamping van inflasie in lande soos New Zealand,
Kanada, Israel, Die Verenigde Koningkryk, Swede, Australia en Spanje, waar lae inflasie koerse
behaal is en gehandhaaf word. Alhoewel 'n beleid van inflasie bekamping met indirekte koste en
'n verlies in produksie en werksgeleenthede gepaard gaan, is daar geen bewyse dat die
implementering van inflasie teikens 'n wesenlike effek op die ekonomie in die langtermyn het
nie. Inteendeel, lae inflasie in die teikengroep lande het verseker dat voortdurende ekonomiese
groei oor die langtermyn gehandhaaf kon word.
'n Beleid van inflasie bekamping is nie wenslik vir alle lande nie. Daar is verskeie
ontwikkelende lande wat nie aan die basiese voorvereistes vir die implementering van 'n beleid
van inflasie bekamping voldoen nie.
In hierdie studie word die wenslikheid, al dan nie vir die implementering van 'n beleid van
inflasie bekamping, as 'n beleidsoplossing in die bekamping van inflasie in Suid Afrika
ondersoek. Ten einde dit te bereik word die fokus op die hoof karaktertrekke en einskappe van
inflasie bekamping geplaas. Die redes waarom lande inflasie bekamping implementeer, asook die voorvereistes waaraan voldoen moet word, alvorens 'n beleid van inflasie bekamping
geimplementeer kan word, word bespreek. Die voor- en nadele van hierdie werkswyse word ook
uitgelig.
Voorts word gefokus op die implementering van inflasie bekamping in ontwikkelde ekonomieë,
om te bepaal of dit op die ekonomieë van ontwikkelende lande toegepas kan word, en indien wel,
watter ontwikkelende lande?
Toegerus met 'n begrip van die teoretiese aspekte van inflasie bekamping, gepaardgaande met
die internasionale ervarings, word daar gefokus op die wenslikheid, vir die implementering van
'n beleid van inflasie bekamping in Suid Afrika.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/53187 |
| Date | 03 1900 |
| Creators | Gill, Madeline |
| Contributors | Roux, A., Stellenbosch University. Faculty of Economic & Management Sciences. Graduate School of Business. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | Unknown |
| Type | Thesis |
| Format | 67 p. |
| Rights | Stellenbosch University |
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