The alleviation of poverty and the increment of growth within a nation, such as ours, are achieved through the dual use of fiscal and monetary policy. The essay will give a brief description of both policies as well as the manner in which they theoretically operate when attempting to achieve their goals. A look at the current policies currently being used in the country and their success will be assessed in comparison with the policy aims. Lastly, a look at whether the current fiscal and monetary policies being used are actually achieving their goals and the reasons for their success of failure.
According to the (Griffiths & Wall, 2005) the definition of the monetary policy is the governmental manipulation of the demand and supply of money with the intention of achieving specified government objectives. The government will go about this manipulation by altering the two main variables that affect the demand and supply of money, namely being the quantity of money in the market and the rate of interest. In the South African context the monetary policy objectives are sought by altering the rate of interest. In the (Roux, 2008) the monetary policy is further defined as a mechanism to “smooth fluctuations in the prices, the balance of payments and employment” through either expansionary or restrictive policies being followed monetary policy committee. It should be noted that there are many opposing views to the effectiveness of the monetary policy in the achieving of its goal of inflation target in South Africa and is seen through (Dr Mollentze, 2014). The monetary policy can be used in both the short term and long term in order to achieve steady growth in output, low inflation and achieve full employment as st...
... middle of paper ...
...how that for the NDP to be successful, “the five common characteristics of high growth economies…” are necessary of which monetary policy could aid with the macroeconomic stability and the mustering of high rates of savings and investments. Thereby addressing the aggregate demand balanced equation of by simultaneously increasing: savings and investment; government expenditure and taxes, which would lead to growth of the economy and also alleviate poverty.
So a better implementation strategy and economic environment would result in the NDP being successful while incorporating NGP goals, the better economic environment would facilitate the expediency of the monetary transformation mechanism. Both of these requirements would also be aided by a more “credible and capable government” (Laubscher, 2014) being one of the characteristics required for a high growth economy.
Need Writing Help?
Get feedback on grammar, clarity, concision and logic instantly.Check your paper »
- Subject area Any sovereign state is to some extent concerned about the existence of informality in its economy. Although the subject of informal economy is broadly presented in interdisciplinary research, it remains understudied, especially from an entrepreneurship perspective in developing context (Castro, Khavul, & Bruton, 2014). At the same time the problem of poverty alleviation is particularly up-to-date in the light of millennium development goals, first of which is eradication of extreme poverty and hunger.... [tags: social capital, informal economy]
1424 words (4.1 pages)
- Microcredit is a financial innovation that is considered to have originated with the Grameen Bank in Bangladesh, and Muhammad Yunus is its founder. This Bank offers collateral free loan to rural poor women. Women are afforded the opportunity of education and access to health care, reduced unemployment, so that their families and communities prosper. The future of the Microcredit is very bright now because it plays an important role for the development of poor families. This system is being introduced in both developing and developed countries of the world.... [tags: world poverty essay]
2262 words (6.5 pages)
- ... The funding for these policies is attained through the different taxes existing within (Roux, 2008) a nation. In South Africa we are informed of these policies through the budget speeches that are given yearly as well of the taxes that will be used to gather the funds for the implementation of the policies. It has also been described as “growth orientated” in the (Mollentze, 2014). The manner in which the fiscal policy works, since it is attached to government spending is through the multiplier effect, therefor the components of the multiplier will also need to be considered when the effectiveness of the fiscal policy is considered as was shown in the (Charl Jooste, 2012).... [tags: monetary policy, fiscal policy]
1602 words (4.6 pages)
- To get a clear understanding of the contributions by faith-based social services and where they stand, it is important to first define a faith-based organization and explore the theories from which they derive. Staff of these organizations may most often share the same faith and provide service in accord with their beliefs. “For some faith-based organizations, faith is manifest in the act of service itself, conspicuous in the compassion inherent in the way work is performed. For others there are programmatic elements which may include prayer, the teaching of religious values, studying religious texts, and worship.... [tags: Religion, Poverty, Faith-based organizations]
1283 words (3.7 pages)
- ‘In the world of development, if one mixes the poor and the non-poor [sic] in a program, the non-poor will always drive out the poor, and the less poor will drive out the more poor, unless protective measures are instituted right at the beginning. In such cases, the non-poor reap the benefits of all that is done in the name of the poor’ (Yunus, 1999:42). This quote goes to show how misunderstood the term ‘development’ is in the West, as the root causes of poverty are never fully addressed beforehand in order to assess what type of development is necessary for a country in the Third World.... [tags: world poverty, global poverty]
1824 words (5.2 pages)
- People have been trading since the beginning of time. The exchange of goods is why humans have strived to make new discoveries and why we attach value to goods and services. This has gone on to evolve over time to encapsulate a global system of trade which we are now dependent on to meet our needs. Unfortunately, the system is capitalised on. David Ricardo’s concept of comparative advantages has brought about true Globalisation, affecting every man and woman on the planet with the fluctuation of prices in raw materials.... [tags: fundamentalism, neoliberal market, world trade]
1992 words (5.7 pages)
- Globalization: Effective Ways for Individuals to Contribute to Solving World Hunger Problems Millions of people die each year, all over the world because of hunger and disease, many of whom are children (Global issues, 2010). Millions of other people suffer because of hunger, many of whom are in Sub-Saharan Africa and Asia. However, there are several thousand tones of food that is wasted every year. This occurs when people through away food, during harvest, during storage and when crop is destroyed by pests, insects, diseases and animals.... [tags: Poverty ]
1950 words (5.6 pages)
- organized way giving the reader all necessary data, calculations, and formulas. It was both informative and accessible to the readers. Betty Claire Mubangizi took a focus on poverty. What challenges did poverty bring to post-apartheid South Africa. How effective were the government anti-poverty measures. These are the questions Mubangizi tries to answer. Mubangizi starts off by giving various definitions of poverty. The first definition given is the World Bank’s, which uses consumption levels and income to define poverty.... [tags: Poverty, Economic inequality, Africa]
1095 words (3.1 pages)
- Bums. Addicts. Strays. Hobos. Homeless. In America, there is no optimism for the homeless. These people are a lost cause. They are just a waste- a blight to our beautiful cities. No one wants to acknowledge the man asleep in a deserted construction site. No one wants to imagine that he once had a purpose or that he once had hope for his future. Most of all, no one wants to recognize that he got to where he is today because our society as a system has failed him. For so many homeless people like this man, their problems begin as young adults.... [tags: Poverty, Homelessness, Street children]
1486 words (4.2 pages)
- INTRODUCTION In the global economy, issues of poverty has for some time been at the centre of developmental goal of nations. The poor nations are eager to come out of poverty; the rich nations are evolving welfare strategies to improve the quality of life of their people. Poverty has been defined in many ways by several scholars, but what seems to be a general consensus is that poverty is a multidimensional phenomenon. According to (Narayan and Petesch 2002) Poverty is regarded as lack of financial capability to obtain basic need of life such as food, cloth, shelter as well as lack of access to education, health care and security.... [tags: world poverty, global poverty]
1879 words (5.4 pages)