Question paper diploma in economics

MAE306D ASSIGNMENT TWO 2ND SEMESTER

THE SOUTH AFRICAN RESERVE BANK (SARB) INFLATION TARGETING
REGIME FROM 2000 2008


There are different views about the contribution of IT during the period 2000 2008.
Some authors claim that it helped reduce inflation and promoted healthy
macroeconomic performance in South Africa (Aron and Muellbauer 2007; Merwe
2004; Mnyande 2008). In the US context, Bernanke (2004) argues that
improvements in the execution on monetary policy can plausibly account for a
significant part of the Great Moderation. Likewise, Aron and Muellbauer (2007, 708)
claim that ‘‘[the new monetary policy regime has enabled SA to participate in these
global trends, despite major exchange rate shocks’’.


QUESTIONS
Assess whether these sanguine views are correct, through the investigation of the
performance of the SARB during this period.


In doing this, focus on the performance of the main macroeconomic and income
indicators, such as:


1. Inflation, (10)
2. Output, (10)
3. The exchange rate, (10)
4. Unemployment and (10)
5. Income inequality. (10)