South Africa's Fiscal & Monetary Policy
South Africa’s Fiscal & Monetary Policy
o Table Of Contents
o Introduction o Body o Conclusion o References
Introduction
In this presentation I will discuss whether or not the South African fiscal and monetary policy are complimentary or not. We need to first define both the fiscal and monetary policy in their economic sense. Firstly, the formal definition of the monetary policy are all the deliberate steps of the monetary authority to affect monetary aggregates such as the money supply, the availability of credit, and interest rates in order to influence monetary demand, income, production, prices and the Balance Of Payments (Frederick C v N Fourie, Phillip Burger, 2009, 349). Monetary policy is the responsibility of the Reserve Bank ( as the monetary authority). The Reserve Bank is also responsible for the exchange rate policy. Exchange rates are closely interwoven with interest rates and monetary conditions that this area is seen and managed as an integral part of the monetary policy.
Fiscal Policy is defined as all the efforts of government to use changes in government expenditure, taxation (including transfers) and government borrowing to influence aggregate expenditure in order to influence production, income, inflation and the Balance Of Payments (Frederick C v N Fourie, Phillip Burger, 2009,375). Fiscal policy is the responsibility of the government ( as the fiscal authority).
Whether or not these two policies are complimentary has spurred huge debates, especially from 2002 right up until the present day. In contemplating the different policy steps in order to affect the standard macro economic variables, a basic consideration of the different macro economic impacts and side effects of the monetary and the fiscal policy. A comparison of the basic macro economic effects of the fiscal and the monetary policy results in contrasts and may not always be complimentary.
Body
Monetary VS Fiscal Policy
A fiscal expansion imposed by the government via
o Table Of Contents
o Introduction o Body o Conclusion o References
Introduction
In this presentation I will discuss whether or not the South African fiscal and monetary policy are complimentary or not. We need to first define both the fiscal and monetary policy in their economic sense. Firstly, the formal definition of the monetary policy are all the deliberate steps of the monetary authority to affect monetary aggregates such as the money supply, the availability of credit, and interest rates in order to influence monetary demand, income, production, prices and the Balance Of Payments (Frederick C v N Fourie, Phillip Burger, 2009, 349). Monetary policy is the responsibility of the Reserve Bank ( as the monetary authority). The Reserve Bank is also responsible for the exchange rate policy. Exchange rates are closely interwoven with interest rates and monetary conditions that this area is seen and managed as an integral part of the monetary policy.
Fiscal Policy is defined as all the efforts of government to use changes in government expenditure, taxation (including transfers) and government borrowing to influence aggregate expenditure in order to influence production, income, inflation and the Balance Of Payments (Frederick C v N Fourie, Phillip Burger, 2009,375). Fiscal policy is the responsibility of the government ( as the fiscal authority).
Whether or not these two policies are complimentary has spurred huge debates, especially from 2002 right up until the present day. In contemplating the different policy steps in order to affect the standard macro economic variables, a basic consideration of the different macro economic impacts and side effects of the monetary and the fiscal policy. A comparison of the basic macro economic effects of the fiscal and the monetary policy results in contrasts and may not always be complimentary.
Body
Monetary VS Fiscal Policy
A fiscal expansion imposed by the government via
References: (Frederic C v N Fourie and Phllippe Burger, 2009, How To Think And Reason In Macroeconomics (3e) Juta & Co Ltd) (Thomas Steiner;29 July 2006)