The Endogenous/Exogenous Nature of South Africa’s Money Supply Under Direct and Indirect Monetary Control Measures

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractThe main purpose of this paper is to describe South Africa's money supply process along several competing, but not mutually exclusive, theoretical paradigms over the period . The most important conclusion to be drawn from the empirical results is that irrespective of the monetary system at the time, the money supply process in South Africa is endogenously determined. The empirical analysis further shows that the inability of the South African Reserve Bank (SARB) to reach predetermined M3 monetary growth targets on a consistent basis since the mid 1980s is the direct result of an endogenous money supply and not, as a previous study claims, because of an unstable M3 velocity. Although the M3 velocity is stable over the whole period 1966-1997, money income determined an endogenous money supply, so that the M3 money supply lost its effectiveness as a leading indicator for monetary policy. The policy implication is that the SARB controlled the M3 money supply indirectly over the period 1980-1997, through an increase in interest rates, and at the potential cost of a slowdown in economic activity. JEL Classification: C22, E51, E52, E58

Para Arzinin İçselli̇ği̇ Hi̇potezi̇: Türki̇ye İçi̇n Ampi̇ri̇k Bi̇r Anali̇z (2006-2018)

“…Faizin belirlenme sürecine bağlı olarak paranın endojenliği uyumcu, yapısalcı ve likidite tercihi görüşü olmak üzere üçe ayrılmaktadır (Arestis et al, 1999: 539). Aşağıdaki tabloda sözü edilen ayrım özetlenmektedir: Nell, K. S. (2000).…”

The Endogenous Money In Iran: What it is and Why it Matters

“…However, all these studies exclusively encompass developed and middle-income economies. Lavoie [22], Nell [23], Vera [24], and Pollin [25]have presented a time series analysis to test the money endogeneity hypothesis for the case of Canada, and USA, South Africa, Spain, and US respectively. Diagne [26] ,and Tang [27]also empirically reinvestigate the long-run money demand function and its stability .…”

The Relationship Between Money Supply, Interest Rate and Inflation Rate: an Endogeneity-Exogeneity Approach

“…Structural endogeneity and liquidity preference approach suggest that interest rate is determined endogenously like money supply while interest rates are determined by the Central Bank exogenously according to defenders of full endogeneity (Nell, 1999). If we assume that money supply is endogenous, Central Bank is not the sole authority in the identification of neither money supply nor interest rate.…”