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EN/ADM/2014/Pres/14
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
2
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
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
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
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.interest ratet+ ɛt
QB March 2011
Economic interpretation
QB March 2011
Booklet
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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
CONCLUSION
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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
Thank you
[email protected]
Tel: +27 12 313 3874
Fax: +27 12 313 4014
QB March 2011