Monetary policy and disintermediation in South Africa : 1970–2010 / Michael Oldfield

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dc.contributor.author Oldfield, Michael John en_US
dc.date.accessioned 2011-08-25T06:16:27Z
dc.date.available 2011-08-25T06:16:27Z
dc.date.issued 2011 en_US
dc.identifier.uri http://hdl.handle.net/10394/4468
dc.description Thesis (M.Com. (Economics))--North-West University, Potchefstroom Campus, 2011.
dc.description.abstract This study examines the development of monetary theory and various policy frameworks as implemented at the time of writing. The aim of the study was to determine the effect of monetary policy on disintermediation and re–intermediation throughout the periods of the various monetary policy frameworks in South Africa, specifically between 1970 and 2010. In order to achieve the research objective given above, a review was firstly conducted of the literature on monetary theory and policy. This literature review gave attention to the various methods of evaluating the extent of disintermediation, elaborating on the various factors that influence the disintermediation process. The literature suggests that the occurrence of disintermediation can be determined by comparing income velocity data to real interest rate data. The second step in achieving the research objective was to examine the South African income velocity data in comparison to the South African real interest rate data over the period 1970 to 2010. The study found that disintermediation arises from the application of semi–direct or direct monetary controls, which in turn creates abnormal interest rate gaps. Despite the different monetary frameworks adopted in South Africa from 1970 to 2010, a uniform response can be noted. It is observed that whenever real interest rates trough, income velocity in turn peaks, indicating disintermediation. The opposite is true for a high real interest rate environment; income velocity declines, indicating re–intermediation, as returns are sought for in the banking sector. It is also observed that monetary policy implementation proves difficult owing to its forward–looking nature. Complications arise out of the elasticity of transmission mechanisms, the lag effect thereof and models that are backward looking based on historical data. In short, the study found that care should be taken by monetary authorities not to over–act in either direction, whether monetary tightening or easing. en_US
dc.publisher North-West University
dc.subject Disintermediation en_US
dc.subject Financial intermediation en_US
dc.subject Income velocity en_US
dc.subject Inflation targeting en_US
dc.subject Interest rates en_US
dc.subject Monetary policy en_US
dc.subject Money supply en_US
dc.subject Re-intermediation en_US
dc.subject Aanbod van geld en_US
dc.subject Disintermediasie en_US
dc.subject Finansiële intermediasie en_US
dc.subject Inflasiemikpuntstelling en_US
dc.subject Monetêre beleid en_US
dc.subject Omloopsnelheid van geld en_US
dc.subject Reintermediasie en_US
dc.subject Rentekoerse en_US
dc.title Monetary policy and disintermediation in South Africa : 1970–2010 / Michael Oldfield en_US
dc.type Thesis en_US
dc.description.thesistype Masters en_US

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    This collection contains the original digitized versions of research conducted at the North-West University (Potchefstroom Campus)

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