oa South African Journal of Economic and Management Sciences - An empirical capital market rate function for an emerging market economy in international financial crisis
|Article Title||An empirical capital market rate function for an emerging market economy in international financial crisis|
|© Publisher:||University of Pretoria|
|Journal||South African Journal of Economic and Management Sciences|
|Affiliations||1 Department of Economics, University of Pretoria|
|Publication Date||Sep 1999|
|Pages||335 - 357|
|Keyword(s)||Bond rate functions, Capital market rate functions, Capital markets, Democratic elections, Dynamic simulation, Economics, Emerging market economies, Empirical models, F 40, Finance, Financial markets, Interest rates, International developments, International financial crises, JEL, Modelling, Monetary policies, South Africa and Structural changes|
ISI Social Science
After the first democratic election in South Africa in April 1994, South Africa's financial markets became more exposed and vulnerable to international developments, vide the financial crisis of 1998. This vulnerability raises some important questions. Has its greater degree of openness led to a structural change in the South African economy? Are long-term interest rates now primarily determined by international sentiment regardless of domestic economic and political conditions, during periods of international financial market volatility? And, in the event, what is the consequent effect on monetary policy in South Africa? The aim of this paper is to investigate these questions by using a cointegration approach to estimate a long-run interest or bond rate function for South Africa.
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