While Financial inclusion has been largely considered to play an important role to eradicate poverty and boost economic prosperity, some empirical literature has shown differing sentiments, suggesting that vast access to finance may potentially bring about market instability to the economy. This relationship between financial inclusion and macroeconomic stability is in greatly under researched, from a global and local perspective. This paper utilizes a VAR model to analyse the relationship between financial inclusion and macroeconomic stability in South Africa, using quarterly time series data from 2004 to 2019. To measure macroeconomic stability, the study used two macroeconomic factors, namely output and inflation, and commercial bank branches per 100,000 adults (CBB) was used as a measure of financial inclusion.  The results find a positive relationship between financial inclusion and output, a 1% increase in CBB causes output to increase by 0.04%. Financial inclusion is also found to have a positive impact on inflation in the long run. Important policy implications point to the importance of financial inclusion in impacting output, and the need to find a balance between financial inclusion and inflation control. As such, Macroeconomic policy maker can use financial inclusion as a tool to retain macroeconomic stability.

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This study is premised on investigating the effectiveness of inflation targeting in South Africa. The methods of analysis include the Vector Autoregressive model (VAR), the unit root test and cointegration test. The analysis was conducted with the use of EViews version 9. The findings from the study revealed that the response of inflation is not consistent with the Taylor rule hence increases in the repo rate meant to reduce inflation actually increase the inflationary pressures in the economy. This is due to the composition of the Consumer Price Index. Housing constitutes the largest weight on the CPI hence this has an impact on how the Repo rate affects inflation. The autoregression model of inflation showed that the sum of the coefficients is less than one (0.965) showing that inflation targeting has effectively reduced the persistence of inflation in South Africa. Thus monetary framework in South Africa seems to be effective and should thus be advanced for wider economic benefit.

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This article investigates exchange rate pass-through to domestic prices in Namibia. The study covers the period of 1993:Q1 – 2011:Q4, and employed the impulse response functions and variance decompositions obtained from a structural vector autoregressive model. The results from the impulse response functions show that there is a high and long-lasting effect from changes in exchange rates to inflation in Namibia, or high exchange rate pass-through into domestic inflation. The results from the forecast error variance decompositions also reflect that changes in the price level evolve endogenously with changes in the exchange rate. The results are in agreement with the findings of the impulse response functions regarding the significant effect of the exchange rate variable on domestic prices (inflation). The results confirm an incomplete pass-through, indicating that the purchasing power parity theory does not hold, with regard to the price level, in the context of Namibia.