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External Imbalances and the Valuation Channel
South Africa has been a net debtor of international capital since the South African Reserve Bank began measuring the international investment position in 1956. This surplus in the financial account has been partially used to finance the persistent current account deficit, which has given rise to a l...
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| Format: | Thesis |
| Language: | English |
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School of Economics
2017
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| _version_ | 1867613206779789312 |
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| access_status_str | Open Access |
| author | Whitehead, Basil Thomas |
| author2 | Kotzé, Kevin |
| author_browse | Kotzé, Kevin Whitehead, Basil Thomas |
| author_facet | Kotzé, Kevin Whitehead, Basil Thomas |
| author_sort | Whitehead, Basil Thomas |
| collection | Thesis |
| description | South Africa has been a net debtor of international capital since the South African Reserve Bank began measuring the international investment position in 1956. This surplus in the financial account has been partially used to finance the persistent current account deficit, which has given rise to a large negative net international financial position. The current practice for calculating the size of the financial account is to net off the size of the foreign assets and foreign liabilities, where use is made of the flow values at the date of transfer. In this paper we seek to incorporate the effects of changes in the values of these foreign assets and liabilities, which would ultimately effect the sustainability of an external imbalance. After we derive appropriate measures of the respective variables, we make use of a Bayesian structural vector autoregressive model that is able to capture stylised features that relate to the volatility of financial returns. We find that an increase in returns acts in a similar way to that of an improvement in the trade balance, which provides a more favourable external imbalance. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/25529 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:32:27.580Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2017 |
| publishDateRange | 2017 |
| publishDateSort | 2017 |
| publisher | School of Economics |
| publisherStr | School of Economics |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/25529 External Imbalances and the Valuation Channel Whitehead, Basil Thomas Kotzé, Kevin Economics South Africa has been a net debtor of international capital since the South African Reserve Bank began measuring the international investment position in 1956. This surplus in the financial account has been partially used to finance the persistent current account deficit, which has given rise to a large negative net international financial position. The current practice for calculating the size of the financial account is to net off the size of the foreign assets and foreign liabilities, where use is made of the flow values at the date of transfer. In this paper we seek to incorporate the effects of changes in the values of these foreign assets and liabilities, which would ultimately effect the sustainability of an external imbalance. After we derive appropriate measures of the respective variables, we make use of a Bayesian structural vector autoregressive model that is able to capture stylised features that relate to the volatility of financial returns. We find that an increase in returns acts in a similar way to that of an improvement in the trade balance, which provides a more favourable external imbalance. 2017-10-04T14:27:12Z 2017-10-04T14:27:12Z 2017 Master Thesis Masters MCom http://hdl.handle.net/11427/25529 eng application/pdf School of Economics Faculty of Commerce University of Cape Town |
| spellingShingle | Economics Whitehead, Basil Thomas External Imbalances and the Valuation Channel |
| thesis_degree_str | Master's |
| title | External Imbalances and the Valuation Channel |
| title_full | External Imbalances and the Valuation Channel |
| title_fullStr | External Imbalances and the Valuation Channel |
| title_full_unstemmed | External Imbalances and the Valuation Channel |
| title_short | External Imbalances and the Valuation Channel |
| title_sort | external imbalances and the valuation channel |
| topic | Economics |
| url | http://hdl.handle.net/11427/25529 |
| work_keys_str_mv | AT whiteheadbasilthomas externalimbalancesandthevaluationchannel |