1. Mohr & Fourie: Chapter / Hoofstuk 4
ECON111_2013

2. Outcomes Uitkomstes
 What do we measure?  Wat meet ons?
◦ Goals ◦ Doelwitte
◦ Concepts ◦ Begrippe
◦ Definitions ◦ Definisies
 How do we measure?  Hoe meet ons?
 Why do we measure?
 Waarom meet ons?
◦ Evaluation ◦ Evaluasie
◦ Comparison ◦ Vergelyk
 ONTHOU JOU CHECK
REMEMBER YOUR LYS AAN DIE EINDE
CHECK LIST AT THE VAN ELKE HOOFSTUK!
END OF EVERY
CHAPTER!

3. The path forward Die pad vorentoe
 Today  Vandag
◦ Theory - objectives ◦ Teorie - doelwitte
 Monday  Maandag
◦ Calculations ◦ Bereken
 3 Methods  3 Metodes
 CPI  VPI
 Wednesday  Woensdag
◦ Calculations ◦ Bereken
 GDP  BBP
 Unemployment  Werkloosheid

4. What to measure Wat om te meet
 Macro Economic Goals (5)  Makro doelwitte (5)
1. Economic growth (4.2+4.3) 1. Ekonomiese groei (4.2+4.3)
2. Full employment (4.4) 2. Volle indiensname (4.4)
3. Price Stability (4.5) 3. Prysstabiliteit (4.5)
4. External Stability (4.6) 4. Eksterne stabiliteit (4.6)
5. Equitable Distribution of 5. Regverdige inkome verdeling
Income (4.7) (4.7)

6. Econ.-Growth Ekon.-Groei
 Economic growth • Ekonomiese groei
◦ What is it? ▫ Wat is dit?
◦ How do we measure it? ▫ Hoe meet ons dit?
◦ How does it look? (PPC) ▫ Hoe lyk dit? (PMK)
 What is RSA’s GDP • Wat is RSA se BBP
growth rate? groei koers?

7. Other indicators
Latest
Indicator Value
period
Real GDP growth rate 2.6% Sep, 2010
Gross saving as % of GDP 16.7% Sep, 2010
Foreign Debt as % of GDP 27.8% 2009
National government balance as %
of GDP (Fiscal year) -6.2% Dec, 2009
Current account balance (R
millions, seasonally adjusted at
annual rate) -79234.00 Sep, 2010
M3 8.19 Jan, 2011
Claims on the domestic private
sector 5.01 Jan, 2011
Import cover (weeks) 19.37 Sep, 2010
Source: South African Reserve Bank , 2011

9. GDP BBP
 Definition ... Definisie ...
 4 NB Concepts  4 NB konsepte
◦ total VALUE of...
◦ totale WAARDE van
◦ all FINAL G&S produced
◦ Within a specific TIME ◦ alle FINALE G&D
PERIOD geproduseer
◦ within the BORDERS of a ◦ in ‘n sekere TYDPERK
country ◦ binne die GRENSE van ‘n land
◦ GDP @
 Market prices ◦ BBP @
 Mark prys (besteding b)
 Factor prices
 Faktor koste (inkome b)

10. Nominal vs. Real Nominaal vs. Reël
NO MINAL prices ... NO MINALE pryse ...
◦ The price NOW
◦ Current prices
◦ wat NOU gevra word in
◦ Inflation INcluded die winkel
◦ Huidige pryse ...
◦ Inflasie INgesluit
RE AL prices ... RE ëLE pryse ...
◦ RELATIVE to a base year
◦ RELATIEF tot ‘n basisjaar
◦ Constant prices ...
◦ Konstante pryse ...
◦ Inflation EXcluded
◦ Inflasie UITgesluit

11. GDP C+I+G+(X-Z) BBP
GDE BBB
C+I+G
NI NI
BNI
GNI

13. Full employment Volle indiensname
 Full employment  Volle indiensname
◦ Ideal? ◦ Idiaal?
◦ Unemployment rate? ◦ Werkloosheids koers?
◦ NB! Economic growth ◦ NB! Ekonomiese groei is
does not equal full nie gelyk aan volle
employment. indiensname nie.

16. Price Stability Prys stabiliteit
 Price Stability  Prysstabiliteit
◦ What is it? ◦ Wat is dit?
◦ How do we measure it? ◦ Hoe meet ons dit?
 Nominal  Nominaal
 Real  Reël
 CPI-basket  VPI-mandjie

17. CPI VPI
 INDEX  INDEKS
 Based on “typical” average  Gebaseer op ‘tipiese’
use gemiddelde verbruik

18. CPI VPI
 Prices vs. Purchasing Power  Pryse vs. Koopkrag
 Inflation erodes PP  Inflasie vreet koopkrag op
 Real value of money =  Reële waarde van geld =
Purchasing Power Koopkrag
 Nominal value of money =  Nominale waarde van geld =
PRICE PRYS
 Definition ...  Definisie ...

19. 1978

21. External Stability Eksterne Stabiliteit
 What is it?  Wat is dit?
 Why NB?  Waarom NB?
Current Account
Trade Balance (Gds +X,-M) Capital Transfers
+ net gold (commodity gold) No reciprocal obligation but Capital
+ net income (receipts – pmnts) nature.
+ net service (receipts – pmnts)
+ Current transfers i.e. fixed assets, infra-grants,
Non-reciprocal obligation but monetary emmi/immi funds, gov. debt relief
i.e. gifts, pensions, charity
NB. Balance indicates whether living in debt
or able to pay for consumables
Financial Account
Financial assets, obligation to repay
Change in Official Reserves
BoP Inflow = credit = LOVC or AOVC
Outflow = debit = LOVC or AOVC
Balances BoP via sum of all other
accounts. Direct (Control, >10%, long term)
Portfolio (Speculation, volatile)
Surplus NB for financing transactions, Other
defending forex & repmnt of foreign
debt.
(A) Assets: RSA in OVC
(L) Liability: OVC in RSA
Surplus can also indicate negative Unrecorded
trade relations due to sanctions.
transactions
Statistical estimate
Thus NB to know cause of increase.
Residual amount

22. External Stability Eksterne Stabiliteit
 Balance of Payments (BoP)  Betalingsbalans (BoP)
◦ Definition ◦ Definisie
◦ How do we Measure it? ◦ Hoe Meet ons dit?
 Surplus  Surplus
 Deficit
 Te kort
 Lopende Rekening
 Current Account
◦ Vloei van G&D
◦ Flow of G&S
 Finansiele rekening
 Financial Account
◦ Vloei van GELD
◦ Flow of MONEY

25. Equity Gelykheid
 What is it?  Wat is dit?
 How do we measure it?  Hoe meet ons dit?
◦ Lorenz Curve ◦ Lorenz Kromme
◦ Gini coefficient ◦ Gini koëffisiënt
◦ Quantile relation ◦ Kwantiel verhouding

26. Equity Gelykheid
Lorenz Kurwe / Curve GINI
 Asse / Axis  Formule / Formula
 Max  Waarde / Value
 Indeks / Index
Kum.% Inkome
Kum.% Bevolking

27. 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

28. Wednesday Woensdag
• NB!!!!  NB!!!!
• TEST  TOETS
REMEMBER
YOUR

29. Monday Maandag
• CALCULATIONS  BEREKEN
• 3 Methods  3 Metodes
• CPI  VPI
REMEMBER
YOUR