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The Marshall-Lerner condition states that a trade balance improves after currency depreciation if trade elasticities exceed one. Using the Vector Error Correction Method (VECM), this study tests the condition for South Africa, focusing on how exchange rate changes affect the trade balance under a floating exchange rate regime. The analysis examines short- and long-run impacts on exports and imports to assess whether exchange rate adjustments can improve the trade balance. Findings reveal that global income growth and exchange rate appreciation positively influence exports, while imports increase with both appreciation and higher domestic income. Although exports and imports respond strongly to exchange rate changes, the Marshall-Lerner condition does not hold for South Africa, suggesting that exchange rate adjustments alone may not improve the trade balance.

The present study aims to examine the relationship between exchange rate undervaluation and economic growth in South Africa, focusing on the various transmission mechanisms through which this relationship occurs. Through the adoption of secondary quarterly data spanning the period 1980 to 2018 and a two-step Generalised Method of Moments approach. The study estimated a Behavioural Equilibrium Exchange Rate of South Africa and used it to construct a measure of Exchange rate undervaluation. Further, the study examined the effects of Exchange rate undervaluation on the tradable sector, the savings/capital accumulation sector, and the total factor productivity sector. The study found evidence of the tradable sector and total factor productivity (TFP) channels in South Africa. Therefore, we conclude that there exist valuable lessons to be learnt through the analysis of this relationship on a micro level compared to a macro level. Macro-level studies overlook the individual effects, hence why results have been inconclusive. This, therefore, means that South Africa has an incentive to keep the Rand at a competitive level since the industrial and agricultural sectors benefit from a competitive Exchange rate.

This study investigates the dynamic relationship between credit supply and demand shocks and household consumption in South Africa using a quantile autoregressive distributed lag (QARDL) model. Motivated by the increasing reliance of South African households on debt amid stagnant income growth, rising living costs, and persistent unemployment, the research aims to understand how credit market conditions influence consumption across different segments of the income distribution. Drawing on data spanning from 1970 to 2024, the study incorporates key macroeconomic variables including real GDP per capita, household income per capita, household debt as a percentage of GDP, the credit-to-GDP ratio, inflation, interest rates, and the unemployment rate. The QARDL framework allows for the estimation of both short-run and long-run relationships while accounting for heterogeneity across consumption quantiles. The results indicate that household consumption is more responsive to income shocks and credit availability in the lower and middle quantiles, suggesting heightened sensitivity among poorer households. Credit supply, proxied by the credit-to-GDP ratio, exhibits weak but positive short-run effects, while household debt consistently exerts a negative influence on consumption across all quantiles and time horizons, with stronger effects in lower quantiles. These findings highlight the consumption-depressing effects of excessive debt, especially for financially vulnerable households. Moreover, macroeconomic stability indicators such as inflation and interest rates are found to negatively affect consumption, particularly in lower quantiles, underscoring the uneven transmission of monetary policy. The empirical results support the hypothesis that household debt contributes to financial fragility and undermines consumption over time, while credit supply shocks play a more modest role. The study concludes that policies aimed at improving income stability, managing household debt levels, and enhancing financial inclusion—particularly for low-income groups—are essential for sustaining household consumption and promoting inclusive economic growth in South Africa.

Several official dating institutions viz: SARB, NBER, OECD, CEPR, and others, provide Business Cycle (BC) chronologies with lags ranging from three months to several years. This is problematic for the various oppressed as it poses limits to the usefulness of BC indicators in terms of forecasting and policy implementation at large. In this article, we propose the construction of composite indicators as accurate measures of business cycles in South Africa. We use this composite index to facilitate comparison of both a non-parametric Bry and Boschan dating algorithm and a parametric Markov Switching dating method, in terms of performance and accuracy of dating business cycle turning points in South Africa. Utilising data spanning the period 2000M1 – 2018M12, empirical evidence obtained is such that, composite indices are better than single indicators due to information rich. Further, while the parametric and non-parametric methods’ performances are matched in terms of the number of turning points identified, however, the non-parametric method is more accurate in identifying these turning points. Due to its accuracy the non-parametric method proved to be a promising method of dating business cycle turning points in South Africa and alleviate the problems which are currently facing the South African Reserve Bank, the private sector and the economy at large.

The article reports on the complementarity and substitutability of Macroprudential and Monetary policies in South Africa, based on the interactions of both Business and Financial cycles. To this end, a Dynamic Conditional Correlations and the Asymmetric Dynamic Conditional Correlations MGARCH models together with the Granger Causality model, the Artificial Neural Network VAR model, and the Structural VAR model, were adopted for the analyses of synchronization, causality, and the analysis of shocks to cycles, respectively. Empirical evidence obtained is such that, under conditions of financial and real economic stress in South Africa, there exists high synchronicity and bidirectional causality between CBCI and CFCI. Hence, Macroprudential and Monetary policies become complements, there exists interdependence between the two policies and actions of one policy contributes to the improvement of the other. However, under normal times there exist no synchronicity and a unidirectional causality relationship running from CBCI to CFCI, was observed. Under such conditions, Macroprudential and Monetary policies become substitutes, therefore, the two policies become independent of each other, hence, only one policy can achieve the desired outcome. Overall, a shock to one cycle is a major determinant of the fluctuations of the other cycle.

Following the 2007-2009 global financial crisis, the South African Reserve Bank (SARB) prioritised financial stability. This study assesses the impact of financial stability on South Africa's output and price stability, which is crucial for framing its monetary policy. Utilising a Structural Vector Autoregression (SVAR) approach, the influence of the Financial Conditions Index (FCI) on the Gross Domestic Product (GDP) and Consumer Price Index (CPI) between 1960Q1 and 2022Q4 was analysed. Results revealed a strong connection between these objectives. GDP drops after an FCI disturbance, whereas the CPI trends upwards when the SARB counters financial imbalances. This vital finding indicates a positive relation between enhanced financial conditions and output stabilisation but reveals a trade-off between price and financial stability. After a GDP shock, financial conditions improve, but they deteriorate following a CPI shock. If the SARB reacts by "mopping up" post-crisis, the policy rate typically drops, pointing to potential financial vulnerabilities. Both GDP and CPI react positively to FCI disturbances when SARB is passive. The evidence suggests that while financial stability bolsters output stability, it might endanger price stability. Thus, amongst other recommendations, South Africa's monetary policy authorities must lean against financial imbalances instead of mopping after a crisis

This study investigates the long-term and short-term relationships between different monetary aggregates (M0, M1, M2, and M3) and GDP in Saudi Arabia using the Engle-Granger cointegration test and the Granger causality test. The results reveal that M2 has the most stable long-term relationship with GDP, making it the most reliable aggregate for policy formulation. M1 also shows a strong relationship, while M3’s connection is comparatively weaker. The causality analysis indicates bidirectional relationships between GDP and M1, M2, and M3, suggesting that changes in these aggregates can both influence and be influenced by economic activity. In contrast, M0 shows no significant long-term relationship and only responds to changes in GDP, indicating its limited policy relevance. These findings highlight the importance of using broader aggregates like M2 for effective policy targeting in Saudi Arabia’s evolving economic landscape. The study provides crucial insights for policymakers in selecting appropriate monetary aggregates for long-term planning and short-term economic stabilization.

Despite the many studies on inflation, stock prices, and foreign exchange reserves, there is still little research linking these three with world oil prices to the rupiah exchange rate, especially comparing them to conditions before and after the pandemic. This study aimed to test and analyze the effect of inflation, stock prices, foreign exchange reserves, and world oil prices on the rupiah exchange rate against the dollar. The object of this research is Bank Indonesia and the Stock Exchange by producing a sample in this study which is 62 months. The data is divided into 2 categories 31 months before the co-19 pandemic and 31 months during the co-19 pandemic. Data collection techniques in this study used secondary data.

<p><em>This paper gives an overview of the concept of macroeconomic stabilization and, its measurement, goals and policy instruments. It starts with a review of the concept, measurement and goals of macroeconomic policy and, the goals performance measurement. After this, the paper looks at macroeconomic policies and its instruments, and macroeconomic stabilization problems. The next section examines the applicability of the stabilization instruments under various economic conditions and, this section is followed by a conclusion.</em></p>

<p><em>This article focuses on the empirical relationship between the United States’ and Japan’s yield spread of interest rates and economic growth in Japan. The yield spread is defined in this article as the difference between the Japanese government bond yield minus the US government bond yield. Some studies have tackled this issue and found a negative relationship between the yield spread and economic growth; however, recent studies have shown no or a weak relationship. This problem has not yet reached consensus in spite of its importance. As the Japanese interest rate has been quite low since the adoption of the zero interest rate policy at the end of 1990s, the situation may change the results. The empirical results show that reliability of yield spread as a leading indicator of output growth exists in Japan; however, term structure of interest rate is not related to output growth.</em><em></em></p>

This article focuses on the empirical relationship between the United States’ and Japan’s yield spread of interest rates and economic growth in Japan. The yield spread is defined in this article as the difference between the Japanese government bond yield minus the US government bond yield. Some studies have tackled this issue and found a negative relationship between the yield spread and economic growth; however, recent studies have shown no or a weak relationship. This problem has not yet reached consensus in spite of its importance. As the Japanese interest rate has been quite low since the adoption of the zero interest rate policy at the end of 1990s, the situation may change the results. The empirical results show that reliability of yield spread as a leading indicator of output growth exists in Japan; however, term structure of interest rate is not related to output growth.