The exchange rate and exports Reply

skip vir exportsDuring the past few weeks the rand-dollar exchange rate has been in the news. Analysts are tweeting the all-time lows and debating to what extent this will boost exports and “import inflation”. Minister Gordhan said at the WEF in Davos: “The test is for private sector firms to demonstrate their agility and responsiveness to what are favourable conditions.”.

We have written about the strength of the rand on this blog before and would like to add some perspectives from the academic literature, drawing on an excellent paper Lawrence Edwards and Robert Garlic.

The first step is to think about the channels through which the exchange rate affects exports.

  • The supply of exports is positively related to the rand price of exports. So if the rand depreciates against the dollar, exporters get more rand for every dollar.
  • Relative to domestic costs and prices, exporting is now more profitable and the companies supply more exports. More…

Recommended reading Reply

Right at the start of the year students are buying textbooks for the new semester, but if you are an economist in training, you need to read a bit wider than just the prescribed texts. Last year three new books were published on the challenges facing the South African economy, its businesses and policymakers. So, if you want to keep up with the debate, we have some recommended reading for you.

The first is Zumanomics Revisited, by Prof Raymond Parsons.

Znomics RZumanomics Revisited is a different book from the 2009 edition of “Zumanomics” that comprised a large number of essays on the South African economy edited by Raymond Parsons. The present edition is the vision of one author on the future of the political economy of South Africa. It is an independent assessment of the current state of the economy with a vision of the likely future political economy developments if the policy proposals of the National Development Plan (NDP) are implemented. There is a close relation between the exposition followed by Parsons and that of the NDP. This is explained by the fact that the NDP is an economic-political document based on a synthesis between opposing views. The NDP does not subscribe to a particular political or economic ideology. It presents its analysis and policy proposals from an ideological neutral position. In this respect its policy proposals presuppose a synthesis. It is this feature that qualifies the NDP as a unique policy document that could be implemented without wasting time on diverging ideological debates. Put differently, the implementation of the NDP requires leadership not ideological debates. This is the major theme of Zumanomics version two. In this sense this book projects an optimistic vision of the South African trajectory towards 2030. This is an important stance that requires strong defense in a country that is showing features of optimism fatigue with a failing public sector. You can read Prof Peet Strydom’s full review here. More…

Ekonomie hulpbronne vir Hoërskoolleerders

Die Skool vir Ekonomie aan die NWU-Pukke loods vandag ‘n nuwe inisiatief om Ekonomie hulpbronne beskikbaar te stel vir Hoërskoolleerders. Ons wil graag ons liefde vir die vakgebied deel met die volgende generasie ekonome. ‘n Nuwe deel van ons blog pas die graad 10, 11 en 12 leerplan by ekstra verduidelikings, interessante ekonomiese nuus en die nuutste navorsing in die veld.

back-to-schoolOm af te skop is daar meer inligting oor:

  • Graad 10: Ekonomie as wetenskap, die kringloop en AW Philips se MONIAC rekenaar, Uber se sg. “surge pricing”.
  • Graad 11: Die vergoeding van die produksiefaktore met SA data (maak jou eie tabelle en grafieke).
  • Graad 12: Die ekonomiese kringloop en nasionale rekeninge, met navorsing oor die vermenigvuldiger.

Ons hoop om deur die loop van die jaar nog baie hulpbronne by te voeg.

Het jy ‘n taak of projek en sukkel om inligting in die hande te kry? Registreer en los ‘n opmerking by jou graad se blad en ons gaan ‘n plan te maak.

Eerstejaars 2014 Reply

EerstejaarsontvangsMore ontvang ons die eerstejaars van 2014 op die NWU-Pukkampus en in die Skool vir Ekonomie is ons opgewonde om die nuwe groep ekonome te verwelkom.

Nie almal wat in die ECON111 klas gaan sit is hier om Ekonomie te studeer nie, maar ons hoop om die wêreld van Ekonomie, Internasionale Handel en Risikobestuur aan hulle bekend te stel. In 2014 bied ons vir die eerste keer die nuwe Ekonomie, Risikobestuur + Landbou-ekonomie program aan saam met die vakgroep Landbou-ekonomie. Daar is ‘n span entoesiastiese dosente wat regstaan vir die jaar. Binne die Skool is ons trots daarop om die Rapport Top-dosent te hê en ‘n klomp NRF-gegradeerde navorsers.

As al hierdie dinge jou opgewonde maak, lees bietjie meer:

Hou die blog en ons Faceboek-blad dop vir meer oor die Skool en oor Ekonomie.