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Inflation Dynamics in South Africa

The Role of Thresholds, Exchange Rate Pass-through and Inflation Expectations on Policy Trade-offs

  • Eliphas Ndou
  • Nombulelo Gumata

Table of contents

  1. Front Matter
    Pages i-xlvi
  2. Eliphas Ndou, Nombulelo Gumata
    Pages 1-16
  3. Costs of Disinflation, Inflation Volatility and Policy Trade-offs

  4. The Terms-of-Trade, Fiscal Policy, Labour Market Conditions and Inflation in South Africa

  5. The First Stage of the Exchange Rate Pass-through

  6. Direct Exchange Rate Pass-through and Causes of Non-Linear Inflation Responses to Rand-US Dollar Exchange Rate Depreciation Shocks

  7. Inflation Expectations and Monetary Policy

  8. Back Matter
    Pages 501-525

About this book

Introduction

This book offers a comprehensive empirical analysis of South African inflation dynamics, using a variety of techniques including counterfactual analysis. The authors elaborate the roles in inflation of thresholds, nonlinearities and asymmetries introduced by economic conditions such as the size of exchange rate changes and volatility, GDP growth, inflation, output gap, credit growth, sovereign spreads and fiscal policy, providing new policy evidence on the impact of these. Ndou and Gumata apply techniques to determine the prevalence of updating inflation expectations, and reconsider the propagation effects of a number of inflation risk factors. Asking to what extent the evidence points to a need to enforce price stability and the anchoring of inflation expectation, the book fills existing gaps in South African Policy, and maintains a clear argument that price stability is consistent with the 3 to 6 per cent inflation target range, and that threshold application should form an important aspect of policy analysis in periods of macroeconomic uncertainty. As such, the book serves as an excellent reference text for academic and policy discussions alike.

Keywords

Inflation Disinflation Taylor Curve Garch methodology Supply shocks Volatility Price dispersion Tsay nonlinear approach GDP Monetary policy Exchange rate Fiscal policy shocks

Authors and affiliations

  • Eliphas Ndou
    • 1
  • Nombulelo Gumata
    • 2
  1. 1.South Africa Reserve BankPretoriaSouth Africa
  2. 2.South African Reserve Bank PretoriaSouth Africa

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-319-46702-3
  • Copyright Information The Editor(s) (if applicable) and The Author(s) 2017
  • Publisher Name Palgrave Macmillan, Cham
  • eBook Packages Economics and Finance
  • Print ISBN 978-3-319-46701-6
  • Online ISBN 978-3-319-46702-3
  • Buy this book on publisher's site
Industry Sectors
Finance, Business & Banking