DEEL 3 / SECTION 3

GELD, DIE EKONOMIE EN

MONETÊRE BELEID
MONEY, THE ECONOMY AND
MONETARY POLICY

Arnold 12–15
3.1 Geld en banke / Money and banking
Arnold: Hf 12 / Arnold: Ch 12
• Geld: Wat is dit? / Money: What is it?
• Definisie van geldvoorraad / Defining money supply
• Ontwikkeling van die bankwese / How banking developed beskrywing / description
• Die geldskeppingsproses / The money creation process

3.2 Die Suid-Afrikaanse Reserwebank / The South African Reserve Bank

Arnold: Hf 13 / Arnold: Ch 13

3.3 Geld en die ekonomie / Money and the economy

Arnold: Hf 14 / Arnold: Ch 14
• Geld en die prysvlak / Money and the price level
• Monetarisme / Monetarism
• Inflasie / Inflation
• Geld en rentekoerse / Money and interest rates teorie / theory
3.4 Monetêre beleid / Monetary policy
Arnold: Hf 15 / Arnold: Ch 15
• Die geldmark / The money market
• Transmissiemeganismes / Transmission mechanisms
• Monetêre beleid en die probleem van inflasionêre en resessionêre gapings / Monetary policy and
the problem of inflationary and recessionary gaps beleid / policy
• Monetêre beleid en die aktivistiese / nie-aktivistiese debat / Monetary policy and the activist /
non-activist debate
GELD EN DIE EKONOMIE
MONEY AND THE ECONOMY
 In hierdie hoofstuk / In this chapter
Afdeling 1 / Section 1
Geld en die Prysvlak• Money and the Price level

Afdeling 2 / Section 2
Monetarisme • Monetarism

Afdeling 3 / Section 3
Inflasie • Inflation

Afdeling 4 / Section 4
Geld en Rentekoerse • Money and Interest Rates
4
Geld en die prysvlak / Money and
the price level
AFDELING 1 / SECTION 1

5
 Geldvoorraad en die prysvlak
Money Supply and the price level
• Beïnvloed geldvoorraad (M) die prysvlak (P) in die
ekonomie ? / Does the money supply (M) affect the
price level (P) in the economy?
– Volgens die Klassieke Ekonome = / According to the
Classical economists =
• Waarom? / Why?
– Standpunt gebaseer op die Ruilvergelyking en die Eenvoudige
Kwantiteitsteorie van Geld / Viewpoint based on the Equation
of Exchange and the Simple Quantity Theory of Money

6
 Die Ruilvergelyking
The Equation of Exchange

M = Geldvoorraad • Money supply

V = Omloopsnelheid van geld • Velocity of money
P = Prysvlak • Price level
Q = Reële BBP • Real GDP

≡ Dui identiteit aan, m.a.w. ‘dit moet gelyk

wees aan’ • Indicates an identity, i.e. ‘this must be
equal to’
7
Wat is die omloopsnelheid van geld?
What is the velocity of money?

Gemiddelde aantal kere wat ’n Rand in ’n

jaar gebruik word om finale goedere en
dienste te koop. Dus hoe gereeld geld in die
ekonomie hande wissel. / Average number
of times a Rand is spent to buy final goods
and services in a year. Thus how often
money changes hands in the economy.

8
V in Teorie / V in Theory

9
 In die Praktyk
In Practice
Onmoontlik om te tel soos in die eenvoudige voorbeeld,
daarom… / Impossible to count as in the simple example ,
therefore…
1 Bereken Nominale BBP / Calculate Nominal GDP
2 Bereken gemiddelde M / Calculate average M
3 Dan: V ≡ BBP/M / Then: V ≡ GDP/M

maar indien V ≡ BBP/M but if V ≡ GDP/M

en Nominale BBP = P x Q: and Nominal GDP = P x Q:

V ≡ (P x Q)/M DUS / THUS:
MxV≡PxQ
Ruilvergelyking / Equation of Exchange
 Die Ruilvergelyking
The Equation of Exchange
Hoe interpreteer ons dit? • How do we interpret it?
1: Die geldvoorraad vermenigvuldig met omloopsnelheid moet gelyk
wees an die prysvlak vermenigvuldig met reële BBP: M x V ≡ P x Q
/ The money supply multiplied by velocity must equal the price
level times real GDP: M x V ≡ P x Q
2: Die geldvoorraad vermenigvuldig met omloopsnelheid moet gelyk
wees aan nominale BBP: M x V ≡ BBP (want P x Q ≡ BBP). / The
money supply multiplied by velocity must equal the nominal GDP:
M x V ≡ GDP (because P x Q ≡ GDP).
3. Totale besteding (gemeet deur MV) moet gelyk wees aan die
totale inkome van verkopers (gemeet deur PQ): MV ≡ PQ / Total
spending (measured by MV) must equal the total sales revenues
of sellers (measured by PQ): MV ≡ PQ
11
 Eenvoudige Kwantiteitsteorie van Geld
Simple Quantity Theory of Money
• Wat is dan die verwantskap tussen geld en die
prysvlak? / What is the relationship between money
and the price level?
• Maak aannames omtrent MV ≡ PQ / Make assumptions
regarding MV ≡ PQ
Spesifiek: Aanvaar V en Q is konstant in die kort termyn /
Specifically: Assume V and Q are constant in the short run
Dus / Thus

MV = PQ
Let op: Gebruik ‘=’ want nie meer identiteit (aannames gemaak) / Note: Use ‘=’
as this is no longer an identity (assumptions made)

12
 Eenvoudige kwantiteitsteorie van geld
Simple quantity theory of money

MV = PQ

• Dus: Indien M styg (of daal) moet P ook styg (of daal) / Therefore
as M rises (or falls) so must P (or fall)
• D.w.s. groei in geldvoorraad (“hoeveelheid” van geld) lei tot
styging in die prysvlak / Therefore growth in money supply
(quantity of money) leads to a rise in the price level
• ‘n Verandering in M lei tot ‘n streng proporsionele verandering in P
(10% styg in M = 10% styg in P) / A change in M leads to a ‘strictly
proportional’ change in P (10% increase in M = 10% increase in P)

13
Figuur 1 / Exhibit 1

14
 Vraag / Question

Indien die geldvoorraad verander, lei

dit tot ‘n streng proporsionele
verandering in die prysvlak in die
praktyk? / Do changes in money
supply lead to strictly proportional
changes in the price level in practice?
15
Antwoord / Answer

16
 Vraag / Question

Waar of onwaar? / True or false?

Die ruilvergelyking is ‘n ekonomiese

teorie. / The equation of exchange is
an economic theory.

17
 Vraag / Question
Watter van die volgende is konsekwent met die ruilvergelyking?
/ Which of the following is consistent with the equation of
exchange?
a) Totale besteding moet gelyk wees aan totale
verkoopsinkome van ondernemings. / Total spending must
equal the total sales revenues of firms.
b) Die geldvoorraad vermenigvuldig met die omloopsnelheid
van geld moet gelyk wees aan nominale BBP. / The money
supply multiplied by the velocity of money must equal
nominal GDP.
c) Die geldvoorraad vermenigvuldig met die omloopsnelheid
van geld moet gelyk wees aan die prysvlak vermenigvuldig
met reële BBP. / The money supply multiplied by the velocity
of money must equal the price level times real GDP.
d) a en/and b
e) a, b en/and c 18
Antwoord / Answer

19
Eenvoudige kwantiteitsteorie van Geld in die AD-AS Raamwerk /
Simple quantity Theory of Money in the AD-AS Framework

Doel van raamwerk: Om te ontleed hoe die prysvlak (P) en reële

BBP (Q) reageer op ‘n verandering in M binne die AD-AS raamwerk /
Aim of framework: To analyse within AD-AS framework how the
price level (P) and real GDP (Q) responds to changes in M.

Dit word gedoen om te bepaal of monetêre beleid (deur die

verandering in M) die prysvlak en uitset kan beïnvloed. / This is
done in order to determine whether monetary policy (through
changing M) can impact output and the price level.

20
 AD-kurwe / AD curve

Totale besteding (TE) = C+I+G+(EX-IM)

Total expenditure (TE) = C+I+G+(EX-IM)

Weet ook van vroeër MV = TE (aangesien MV die totale

besteding van geld verteenwoordig)
Know also from earlier that MV = TE (as MV represents
the total expenditure of money)

Dus / Therefore
MV = C+I+G+(EX-IM)
21
 AD-kurwe / AD curve
Figuur 2 / Exhibit 2

• Dus is AD afhanklik van beide M en V

Hence AD depends on both M and V

• Maar aanvaar V konstant (V) in

eenvoudige kwantiteitsteorie van geld /
But we assume V is constant (V)
in the simple quantity theory of money

• Dus, spesifiek: / Therefore, specifically:

M ↑ ⇒ AD ↑
M ↓ ⇒ AD ↓
22
 AS-kurwe / AS curve
Figuur 2 / Exhibit 2
• Die eenvoudige kwantiteitsteorie van geld
aanvaar dat Q is vas by ’n sekere
vlak in die korttermyn /
In the simple quantity theory of money
we assume Q is fixed in the short run
at a certain level

• Dus is AS vertikaal by
hierdie vlak van Reële BBP /
Therefore AS is vertical at
this level of Real GDP

23
 AD- en AS-kurwes saam
AD and AS curves together
• Met AS vas, sal ‘n regswaartse verskuiwing van die AD
kurwe (vanaf AD1 na AD2) lei tot ewewig by hoër prysvlak,
maar by dieselfde vlak van produksie /
With AS fixed, a rightward Figuur 2 / Exhibit 2
shift of the AD curve (from
AD1 to AD2) will result in an
equilibrium at a higher price
level but at the same level
of output
en vice versa / and vice versa

24
 AD- en AS-kurwes saam
AD and AS curves together
Eenvoudige kwantiteitsteorie van geld in die AD-AS
Raamwerk / Simple quantity theory of money in the AD-AS
Framework
Dieselfde gevolgtrekking as eenvoudige kwantiteitsteorie van geld onder
dieselfde aannames: / Under the same assumptions the same conclusions
as simple quantity theory of money
M↑⇒P↑
M↓⇒P↓
Let op dat ‘n verandering in die geldvoorraad nie ‘n impak op reële
uitset het nie / Notice that a change in money supply does not have
an impact on real output
25
 Eenvoudige kwantiteitsteorie van geld sonder die aannames /
Simple quantity theory of money without the assumptions

Wat gebeur met P as V en Q nie konstant is nie? / What

happens to P if V and Q are not constant?

– Herskryf: / Rewrite: M ×V
P=
Q
– Dus, die prysvlak neig om te styg (inflasionêre neigings) indien: /
Hence, the price level tends to rise (inflationary tendencies) if:
M↑ ↑ of/or V↑↑ of/or Q↓↓
– Die prysvlak neig om te daal (deflasionêre neigings) indien: / The
price level tends to decline (deflationary tendencies) if:
M↓↓ of/or V↓ ↓ of/or Q↑↑
26
Monetarisme / Monetarism
AFDELING 2 / SECTION 2

27
 Monetarisme
Monetarism
• Gedurende 1960s ontstaan die monetaristiese denkskool wat
die eenvoudige kwantiteitsteorie van geld verfyn. / During 1960s
the monetarist school of thought developed, refining the simple
quantity theory of money.

• Milton Friedman
Nobelprys vir Ekonomie in 1976
Nobel Prize for Economics in 1976
Hy was ‘n prominente Monetêre
ekonoom. / He was a prominent
Monetary economist.
28
 Monetaristiese sienings /
Monetarist Views
• V is voorspelbaar / V is predictable
– V is nie konstant nie, maar is afhanklik van sekere veranderlikes / V is not
constant, but is dependent on certain variables

• Totale vraag hang af van M EN V / Aggregate demand depends on

M AND V

• SRAS het ’n positiewe helling / SRAS is upward sloping

– Dus : reële BBP is nie konstant in korttermyn nie / Therefore : real GDP is not
constant in the short run

• Die ekonomie is self-regulerend / The economy is self-regulating

• Pryse en lone is aanpasbaar / Prices and wages are flexible.

29
Monetarisme en AD-AS
Monetarism and AD-AS
Figuur 3 / Exhibit 3

30
 Monetaristiese Standpunte
Monetarist Views
• Standpunte / Views
– ∆V & ∆M
beide skuif AD direk / ∆V & ∆M
Both shift AD
directly

– ∆V en/of ∆M
∆P en ∆Q in korttermyn, maar in

langtermyn sal slegs ∆P plaasvind /
– ∆V and/or ∆ M
∆P and ∆Q short run, but in long run
only ∆P occurs

31
 Vraag / Question

Glo Monetariste dat dit teoreties moontlik is dat ‘n

verandering in die omloopsnelheid (V) van geld ‘n
verandering in die geldvoorraad (M) sal uitkanselleer
en so veroorsaak dat monetêre beleid oneffekief is?

Do Monetarists believe that it is theoretically possible

that a change in the velocity of money (V) will offset a
change in money supply (M), thereby making monetary
policy ineffective?
32
Antwoord / Answer

33
 Vraag / Question
Monetariste glo / Monetarists believe
a) reële BBP word nie deur M bepaal in die langtermyn nie. /
real GDP is not determined by M in the long run.
b) Omloopsnelheid van geld is konstant / velocity of money is
constant.
c) die SRAS-kurwe is vertikaal. / the SRAS curve is vertical.
d) Geeneen van bogenoemde nie. / None of the above.

34
Inflasie / Inflation
AFDELING 3 / SECTION 3

35
 Inflasie / Inflation
• Vorige deel handel oor geld en stygings in die prysvlak /
Previous section dealt with money and increases in the price
level
• Ons onderskei nou tussen 2 soorte stygings in die prysvlak: /
We now distinguish between 2 types of increases in the price
level:
– Eenmalige styging in die prysvlak / Once-off increase in the
price level
– Inflasie / Inflation
Inflasie is die volgehoue styging in die algemene prysvlak / Inflation is
the continued increase in the general level of price level
36
 Eenmalige styging in die prysvlak
Once-off increase in the price level
’n Eenmalige styging in die prysvlak / A once-off increase
in the price level
–Vanaf die vraagkant: / From the demand side:
o AD-kurwe skuif eenmalig uit / A once-off rightward shift of
the AD curve
o Dan is: Reële BBP > natuurlike vlak & werkloosheid <
natuurlike vlak; Dus: lone styg; SRAS kurwe skuif links / Then:
Real GDP > natural level & unemployment < natural level;
Thus: wages rise; SRAS curve shifts left
o Ekonomie keer terug na oorspronklike vlak van uitset en die
prysvlak is hoër / Economy returns to its original level of
output, but the price level is higher
37
Eenmalige styging in die prysvlak : vanaf die AD kant
Once-off increase in the price level : from the AD side
Figuur 4 / Exhibit 4

38
 Eenmalige styging in die prysvlak
Once-off increase in the price level
• ’n Eenmalige styging in die prysvlak / A once-off increase
in the price level
– Aanbodkant: / Supply side:
o SRAS-kurwe skuif eenmalig na links / A one-time leftward shift of the
SRAS curve
o Dan is: Reële BBP < natuurlike vlak & werkloosheid > natuurlike vlak; Dus:
lone daal; SRAS kurwe skuif na regs / Then: Real GDP < natural level &
unemployment > natural level; Thus: wages fall; SRAS curve shifts to the
right
o Terug by oorspronklike vlak van uitset & prysvlak / Back at original level
of output & price level
Dus geen LT effek / Thus no LT effect

39
Eenmalige styging in die prysvlak: vanaf die SRAS kant
Once-off increase in the price level: from the SRAS side
Figuur 5 / Exhibit 5

40
 Inflasie / Inflation
Van ‘n eenmalige prysvlak styging na inflasie / From
a once-off increase in the price level to inflation
Volgehoue stygings in AD of afnames in SRAS lei tot
inflasie / Continued increases in AD or decreases in SRAS
lead to inflation

41
 Grafiese illustrasie van inflasie
Graphical illustration of inflation
Figuur 6 / Exhibit 6

42
 Inflasie / Inflation
Maar waarom sal AD aanhou styg? / But why would AD
continue to rise?
– Indien die geldvoorraad aanhou styg … dan sal totale vraag
aanhou styg … en dan sal die prysvlak aanhou styg! / If the
money supply continually grows ... then aggregate demand will
continue to increase … and then the price level will continue
rising!
– Dit lei tot inflasie / This leads to inflation

En wat van volgehoue afnames in SRAS? Sal dit inflasie veroorsaak? /

And what about continued decreases in SRAS? Will this cause
inflation?
43
 Groepwerk / Group work
“Inflation is always and everywhere a monetary
phenomenon.”
Milton Friedman

Bogenoemde is ‘n bekende aanhaling deur Friedman. Maar

WAT het hy hiermee bedoel?
Lees “The Big Question” op bl 298. / The above is a famous
quote by Friedman. But WHAT did he mean by this?
Read “The Big Question” on page 298.

44
Geld en Rentekoerse / Money
and Interest Rates
AFDELING 4 / SECTION 4

45
 Hoe beïnvloed die geldvoorraad rentekoerse?
How does the money supply affect interest rates?
Om dit te verstaan: / To understand how:

ΔM Δi

Kyk na “mark” waar rentekoers vasgestel word (kredietmark) om

effek van ander veranderlikes te bepaal / Look at “market” where
the interest rate is determined (credit market) to determine effect
of other variables
Hoe ΔM rentekoerse affekteer
How ΔM affects interest rates
Figuur 7 / Exhibit 7

47
Hoe ΔM rentekoerse affekteer
How ΔM affects interest rates

Figuur 7 / Exhibit 7

48
Die Rentekoers en die Mark vir Uitleenbare Fondse
The Interest Rate and the Loanable Funds Market

ΔM beïnvloed rentekoerse deur: / ΔM affects

interest rates through:

1) Aanbod van lenings & rentekoerse / Supply of loans &

interest rates
– Soos wat M toeneem, is daar meer fondse beskikbaar om
uitgeleen te word / As M increases, more funds are available
to lend out.

– Likiditeitseffek: verandering in rentekoers a.g.v. hierdie

verandering in aanbod van uitleenbare fondse / Liquidity
effect: change in interest rate due to this change in supply of
loanable funds 49
 Die Rentekoers en die Mark vir Uitleenbare Fondse
The Interest Rate and the Loanable Funds Market

2) Reële BBP & rentekoerse / Real GDP & interest rates

• 2) Reële BBP & rentekoerse / Real GDP & interest rates
– In die korttermyn, sal ‘n verhoging in M die reële BBP verhoog
–/ InInkome-effek: die verandering
the short-run, an increasein rentekoers a.g.v. verandering
in M will increase the realin GDP.
reële BBP / Income effect: change in interest rate due to changes in
– Toename
real GDP
in reële BBP verhoog dan beide die vraag en aanbod
van uitleenbare fondse / An increase in real GDP then
increases both the demand and supply of loanable funds.

– Inkome-effek: die verandering in rentekoers a.g.v. hierdie

verandering in reële BBP / Income effect: change in interest
rate due to this change in real GDP.

50
 Die Rentekoers en die Mark vir Uitleenbare Fondse
The Interest Rate and the Loanable Funds Market

3) Prysvlak en rentekoerse / Prices and interest rates

– Indien M toeneem, sal die prysvlak verhoog / If M increases, the
price level will rise.
– Indien die prysvlak verhoog, sal koopkrag van verbruikers
verlaag en dus die vraag na uitleenbare fondse verhoog (om te
leen en dus dieselfde goedere te kan koop) / If the price level
rises, the purchasing power of consumers decrease and thus the
demand for loanable funds increase (in order to borrow and buy
the same goods)

– Prysvlakeffek: verandering in rentekoers a.g.v. verandering in

prysvlak / Price level effect: change in interest rate due to
change in price level
51
 Die Rentekoers en die Mark vir Uitleenbare Fondse
The Interest Rate and the Loanable Funds Market

4) Verwagte inflasiekoers en rentekoerse / Expected

inflation and interest rates
– Indien M toeneem, skep dit onder verbruikers die verwagting
dat inflasie gaan toeneem. / As M increases, it creates the
expectation amongst consumers that inflation will increase.
– Die vraag na uitleenbare fondse sal dus toeneem, aangesien
verbruikers eerder nou sal leen en koop om stygings in die
prysvlak te vermy. / The demand for loanable funds will
increase, as consumers would rather borrow and buy now in
order to avoid the price level increases.

52
 Die Rentekoers en die Mark vir Uitleenbare Fondse
The Interest Rate and the Loanable Funds Market

4) Verwagte inflasiekoers en rentekoerse (vervolg) /

Expected inflation and interest rates (continued)
– Aanbod van uitleenbare fondse sal afneem, aangesien
uitleners ‘n laer waarde in ruil sal ontvang wanneer inflasie
die geld waarde mettertyd verminder / Supply of loanable
funds will decrease, as lenders would receive a lower value in
return when inflation erodes the value of money in time

– Verwagtingseffek (Fisher-effek): verandering in rentekoers

a.g.v. inflasie-verwagtinge / Expectations effect (Fisher
effect): change in interest rate due to change in inflation
expectations
53
 Die Rentekoers en die Mark vir Uitleenbare Fondse
The Interest Rate and the Loanable Funds Market

LW: by elk van die vier bogenoemde effekte geld die

teenoorgestelde indien daar ‘n verlaging in M is.

NB: for each of the four effects above the opposite

applies if there is a decrease in M.

54
Hoe die SARB die rentekoers beïnvloed /
How SARB affects the interest rate

Figuur 8 / Exhibit 8

55
 Nominale vs. Reële Rentekoerse
Nominal vs. Real Interest Rates

• Nominale rentekoers word deur die mark

bepaal / Nominal interest rate is determined
by the market
Reële rentekoers =

Real interest rate =

 Huiswerk / Homework

Beantwoord die volgende handboekvrae: /

Answer the following textbook questions:
Working with numbers and graphs

p. 307: 5 & 6
Antwoord / Answer
Antwoord / Answer