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Michael Adams 23 June 2014

An introduction to key concepts commonly used in the analysis of the economy by the Research Department. Michael Adams 23 June 2014. MFSM/GFS. GFS. SNA. MFSM. SNA. BOP. Introduction. Visually orientated introduction Economists usually focus on economic growth, stability and equity

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Michael Adams 23 June 2014

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  1. An introduction to key concepts commonly used in the analysis of the economy by the Research Department Michael Adams 23 June 2014

  2. MFSM/GFS GFS SNA MFSM SNA BOP

  3. Introduction • 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 QB March 2011

  4. 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

  5. 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

  6. Economic relationships • 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.interestratet+ ɛt QB March 2011

  7. Economic interpretation QB March 2011

  8. 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 8

  9. Economic chart QB March 2011

  10. 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

  11. Thank you Michael.adams@resbank.co.za Tel: +27 12 313 3874 Fax: +27 12 313 4014 QB March 2011

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