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Current account sustainability: evidence from South Africa
Bibliography : p. 83-88.
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| Other Authors: | |
| Format: | Thesis |
| Language: | English |
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School of Economics
2015
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| _version_ | 1867614417672208384 |
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| access_status_str | Open Access |
| author | North, Andrew |
| author2 | Kahn, Brian |
| author_browse | Kahn, Brian North, Andrew |
| author_facet | Kahn, Brian North, Andrew |
| author_sort | North, Andrew |
| collection | Thesis |
| description | Bibliography : p. 83-88. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/12509 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:51:43.084Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2015 |
| publishDateRange | 2015 |
| publishDateSort | 2015 |
| 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:11427/12509 Current account sustainability: evidence from South Africa North, Andrew Kahn, Brian Economics Bibliography : p. 83-88. This paper investigates a set of "leading indicators" behind large and persistent reductions ('reversals') in South Africa's current account. It begins by providing a theoretical analysis of current account sustainability based on the intertemporal optimisation of consumption, saving and investment decisions. Drawing on these theoretical concepts, a non-structural approach is then adopted in considering a broad range of indicators that are instructive in evaluating the sustainability of current account deficits. In particular, a country's macroeconomic structure and policy, its external position, and other factors such as expectations, socio-political stability and credibility, are identified as important. Based on event study methodology (Eichertgreen et al, 1995) and work by Milesi-Ferretti and Razin (1997, 1998), a multivariate probit model for South Africa's current account 'reversals' is estimated. Using quarterly data from 1965 to 1996, a binary dependent variable is constructed and used to analyse the impact of various theoretically important variables. The results show that South Africa's current account reversals have been influenced mainly by changes in the country's external macroeconomic environment. These include increases in the OECD economic growth rate, improvements in the country's terms of trade (especially through rises in the dollar gold price), and increasing levels of foreign debt. Reversal periods are typically also associated with rising levels of exports and falling levels of imports. While developments on the capital account were expected, prime facie, to have had a significant impact on the current account, this is not borne out well in the regression results. FDI flows, however, are found to be a statistically significant indicator of current account reversals over the sample period. 2015-02-17T13:00:02Z 2015-02-17T13:00:02Z 1999 Master Thesis Masters MA http://hdl.handle.net/11427/12509 eng application/pdf School of Economics Faculty of Commerce University of Cape Town |
| spellingShingle | Economics North, Andrew Current account sustainability: evidence from South Africa |
| thesis_degree_str | Master's |
| title | Current account sustainability: evidence from South Africa |
| title_full | Current account sustainability: evidence from South Africa |
| title_fullStr | Current account sustainability: evidence from South Africa |
| title_full_unstemmed | Current account sustainability: evidence from South Africa |
| title_short | Current account sustainability: evidence from South Africa |
| title_sort | current account sustainability evidence from south africa |
| topic | Economics |
| url | http://hdl.handle.net/11427/12509 |
| work_keys_str_mv | AT northandrew currentaccountsustainabilityevidencefromsouthafrica |