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An introduction to key concepts commonly used in the analysis of the economy by the Research Department
Michael Adams
23 June 2014
EN/ADM/2014/Pres/14
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MFSM/GFS
GFS
MFSM
SNA
BOP
SNA
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Introduction
QB March 2011
Visually orientated introduction Economists usually focus on economic growth, stability
and equity Evaluating the state of the economy:
– Economic growth SNA 1993– Full employment (BC)– Balance of payments (BoP) stability BPM5– Price and financial market stability MFSM2000– An equitable distribution of income GFSM2001
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Reason for chart
• Three fold• Cannot analyse economy without taking into account
all four macroeconomic accounts• According to the four manuals• Three accounts accrual basis (SNA, BoP, MFSM)• 1ST January to 31ST December • One account cash-flow (GFS) ? Semi• 1st April to 31ST March • Adjustments between cash and accrual
(challenged)• Economic analysis /inter linkages in the economy
across divisions• Staff training and development
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Economic analysis/interlinkages
• Design of the Chart• Colour coded• Segments 1-38• Follow format of the Quarterly Bulletin
• BIG BLOCKS• SNA
• Domestic output• Gross domestic expenditure
• GFS• General government• Public corporations
• All institutions must fit in somewhere in the four macroeconomic accounts
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Economic relationships
QB March 2011
Identity relationship:
– GDP = GDP agriculture + GDP mining + GDP manufacturing
………… GDP Gov.Services
– Trade account = X mining + X agriculture + X manufacturing - M
mining – M agriculture – M manufacturing
– Money supply = M1 + M2 +M3– Credit extension = Households + corporates – G -T= Deficit
Behavioural relationship:
– Ct = a + b.Ydt + d.interest ratet+ ɛt
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Economic interpretation
QB March 2011
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Booklet
• Definitions• Flow of chart• Use for Pre-MPC (discussion)• Various forms being used in the Department (NO1, B03,
C68 and F02)• Balance sheet or income statement• Balance sheet – stock position• Income statement – flow position• Government cash-flow position
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Economic chart
QB March 2011
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CONCLUSION
No means exhaustive Each division use area to expand Time series structure Overview Reasons for changes Read the Quarterly Bulletin and the economic overview
of the country
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Thank you
Tel: +27 12 313 3874
Fax: +27 12 313 4014
QB March 2011