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Mohr & Fourie: Chapter / Hoofstuk 4
ECON111_2013
Outcomes Uitkomstes What do we measure?
◦ Goals◦ Concepts◦ Definitions
How do we measure? Why do we measure?
◦ Evaluation◦ Comparison
REMEMBER YOUR CHECK LIST AT THE
END OF EVERY CHAPTER!
Wat meet ons?◦ Doelwitte◦ Begrippe◦ Definisies
Hoe meet ons? Waarom meet ons?
◦ Evaluasie◦ Vergelyk
ONTHOU JOU CHECK LYS AAN DIE EINDE VAN
ELKE HOOFSTUK!
The path forward Die pad vorentoe Today
◦ Theory - objectives
Monday◦ Calculations
3 Methods CPI
Wednesday◦ Calculations
GDP Unemployment
Vandag◦ Teorie - doelwitte
Maandag◦ Bereken
3 Metodes VPI
Woensdag◦ Bereken
BBP Werkloosheid
What to measure Wat om te meet
Macro Economic Goals (5)1. Economic growth
(4.2+4.3)
2. Full employment (4.4)
3. Price Stability (4.5)
4. External Stability (4.6)
5. Equitable Distribution of Income (4.7)
Makro doelwitte (5)1. Ekonomiese groei
(4.2+4.3)
2. Volle indiensname (4.4)
3. Prysstabiliteit (4.5)
4. Eksterne stabiliteit (4.6)
5. Regverdige inkome verdeling (4.7)
Econ.-Growth Ekon.-Groei
Economic growth
◦ What is it?◦ How do we measure it?◦ How does it look? (PPC)
What is RSA’s GDP growth rate?
• Ekonomiese groei
▫ Wat is dit?▫ Hoe meet ons dit?▫ Hoe lyk dit? (PMK)
• Wat is RSA se BBP groei koers?
Other indicators
Indicator ValueLatest period
Real GDP growth rate 2.6% Sep, 2010Gross saving as % of GDP 16.7% Sep, 2010Foreign Debt as % of GDP 27.8% 2009National government balance as % of GDP (Fiscal year) -6.2% Dec, 2009Current account balance (R millions, seasonally adjusted at annual rate) -79234.00 Sep, 2010M3 8.19 Jan, 2011Claims on the domestic private sector 5.01 Jan, 2011Import cover (weeks) 19.37 Sep, 2010
Source: South African Reserve Bank , 2011
GDP BBP Definition ...
4 NB Concepts◦ total VALUE of...◦ all FINAL G&S produced◦ Within a specific TIME
PERIOD◦ within the BORDERS of a
country
◦ GDP @ Market prices Factor prices
Definisie ...
4 NB konsepte◦ totale WAARDE van
◦ alle FINALE G&D geproduseer
◦ in ‘n sekere TYDPERK
◦ binne die GRENSE van ‘n land
◦ BBP @ Mark prys (besteding b) Faktor koste (inkome b)
Nominal vs. Real Nominaal vs. Reël
NOMINAL prices ...◦ The price NOW◦ Current prices◦ Inflation INcluded
REAL prices ...◦ RELATIVE to a base year◦ Constant prices ...◦ Inflation EXcluded
NOMINALE
pryse ...
◦ wat NOU gevra word
in die winkel
◦ Huidige pryse ...
◦ Inflasie INgesluit
REëLE pryse ...
◦ RELATIEF tot ‘n basisjaar
◦ Konstante pryse ...
◦ Inflasie UITgesluit
GDP C+I+G+(X-Z)
GDE C+I+GNI GNI
BBPBBBNIBNI
Full employment Volle indiensname
Full employment◦ Ideal?◦ Unemployment rate?
◦ NB! Economic growth does not equal full employment.
Volle indiensname ◦ Idiaal?◦ Werkloosheids koers?
◦ NB! Ekonomiese groei is nie gelyk aan volle indiensname nie.
Price Stability Prys stabiliteit
Price Stability◦ What is it?◦ How do we measure it?
Nominal Real CPI-basket
Prysstabiliteit ◦ Wat is dit?◦ Hoe meet ons dit?
Nominaal Reël VPI-mandjie
CPI VPI
INDEX Based on “typical”
average use
INDEKS Gebaseer op ‘tipiese’
gemiddelde verbruik
CPI VPI
Prices vs. Purchasing Power
Inflation erodes PP Real value of money =
Purchasing Power Nominal value of money
= PRICE Definition ...
Pryse vs. Koopkrag Inflasie vreet koopkrag
op Reële waarde van geld =
Koopkrag Nominale waarde van
geld = PRYS Definisie ...
1978
External Stability Eksterne Stabiliteit
What is it? Why NB?
Wat is dit? Waarom NB?
BoP
Current AccountTrade Balance (Gds +X,-M)+ net gold (commodity gold)+ net income (receipts – pmnts)+ net service (receipts – pmnts)+ Current transfersNon-reciprocal obligation but monetaryi.e. gifts, pensions, charity
NB. Balance indicates whether living in debt or able to pay for consumables
Capital TransfersNo reciprocal obligation but Capital nature.
i.e. fixed assets, infra-grants, emmi/immi funds, gov. debt relief
Financial AccountFinancial assets, obligation to repay
Inflow = credit = LOVC or AOVC
Outflow = debit = LOVC or AOVC
Direct (Control, >10%, long term)Portfolio (Speculation, volatile)Other
(A) Assets: RSA in OVC(L) Liability: OVC in RSA
Change in Official ReservesBalances BoP via sum of all other
accounts.
Surplus NB for financing transactions, defending forex & repmnt of foreign
debt.
Surplus can also indicate negative trade relations due to sanctions.
Thus NB to know cause of increase.
Unrecorded transactions
Statistical estimateResidual amount
BoP
Current AccountTrade Balance (Gds +X,-M)+ net gold (commodity gold)+ net income (receipts – pmnts)+ net service (receipts – pmnts)+ Current transfersNon-reciprocal obligation but monetaryi.e. gifts, pensions, charity
NB. Balance indicates whether living in debt or able to pay for consumables
Capital TransfersNo reciprocal obligation but Capital nature.
i.e. fixed assets, infra-grants, emmi/immi funds, gov. debt relief
Financial AccountFinancial assets, obligation to repay
Inflow = credit = LOVC or AOVC
Outflow = debit = LOVC or AOVC
Direct (Control, >10%, long term)Portfolio (Speculation, volatile)Other
(A) Assets: RSA in OVC(L) Liability: OVC in RSA
Change in Official ReservesBalances BoP via sum of all other
accounts.
Surplus NB for financing transactions, defending forex & repmnt of foreign
debt.
Surplus can also indicate negative trade relations due to sanctions.
Thus NB to know cause of increase.
Unrecorded transactions
Statistical estimateResidual amount
External Stability Eksterne Stabiliteit
Balance of Payments (BoP)◦ Definition◦ How do we Measure it?
Surplus Deficit
Current Account◦ Flow of G&S
Financial Account◦ Flow of MONEY
Betalingsbalans (BoP)◦ Definisie◦ Hoe Meet ons dit?
Surplus Te kort
Lopende Rekening◦ Vloei van G&D
Finansiele rekening◦ Vloei van GELD
Equity Gelykheid
What is it? How do we measure
it?◦ Lorenz Curve◦ Gini coefficient◦ Quantile relation
Wat is dit? Hoe meet ons dit?
◦ Lorenz Kromme◦ Gini koëffisiënt◦ Kwantiel
verhouding
Equity Gelykheid
Lorenz Kurwe / Curve
Asse / Axis Max
Kum
.% Inko
me
Kum.% Bevolking
GINI Formule /
Formula Waarde / Value Indeks / Index
Poverty levels: people living in poverty by province and race, 2010 (proportions)
Province African Coloured Indian White Total
Eastern Cape 53.9% 34.5% 12.3% 0.6% 49.4%
Free State 44.3% 46.3% 23.0% 1.0% 39.8%
Gauteng 31.5% 25.1% 14.0% 0.5% 24.7%
KwaZulu-Natal 56.9% 26.1% 9.4% 0.6% 49.5%
Limpopo 48.5% 20.9% 22.4% 2.8% 47.3%
Mpumalanga 49.4% 35.0% 12.4% 0.9% 45.9%
North West 49.8% 50.3% 17.6% 1.7% 45.7%
Northern Cape 50.7% 46.0% 17.4% 0.8% 43.3%
Western Cape 37.0% 23.2% 13.7% 0.5% 22.1%
South Africa 47.4% 28.4% 11.1% 0.7% 39.9%
Source: IHS Global Insight Southern Africa, Regional eXplorer ver 566, 2011
Wednesday Woensdag
• NB!!!!• TEST
NB!!!! TOETS
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Monday Maandag
• CALCULATIONS• 3 Methods• CPI
BEREKEN 3 Metodes VPI
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