How have the gross capital flows and short-term portfolio flows affected household welfare in South Africa between 1994 and 2011?
The defining features of modern capitalist economies have been regular episodes of financial crises. The global economy is now more integrated and interlinked with finance being one of the essential levers through which inter-linkages across domestic economic sectors are fortified. The linkages between real and financial accounts are established through inter-sectoral economic transactions which affects stock positions and flows. The accounting approach to economic analysis is a useful instrument in giving a comprehensive picture regarding the performance of sectors in the economy and point where potential problems in the system could be building up and dictate the policy measures that are likely to be useful. The Flow-of-Funds (FoF) and Balance Sheet Approach are instruments through which the impact of capital flows on households is traced. The household balance sheet and FoF accounts are used to make inferences about household welfare and how they fared in the period under review. Keywords: Accounting Approach, Flow-of-Funds, Balance Sheet Approach, Households Welfare, Financialisation