© 2017

Inflation Dynamics in South Africa

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


  • Offers empirically based policy recommendations on pertinent and currently relevant policy gap areas

  • Authored by central bank policy research economists who are privy to the current policy debates and dilemmas

  • Contains relevant and timely policy recommendations that can be implemented


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

    1. Front Matter
      Pages 209-209

About this book


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.


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

  1. 1.South Africa Reserve BankPretoriaSouth Africa
  2. 2.South African Reserve Bank PretoriaSouth Africa

About the authors

Eliphas Ndou is an economist at the South African Reserve Bank, and a lecturer at the University of the Witwatersrand, Johannesburg, South Africa. His research interests include international finance and macroeconomics, applied macro and microeconomics, monetary policy, fiscal policy, banking regulation and macro prudential policy.

Nombulelo Gumata is an economist at the South African Reserve Bank and a part-time lecturer/tutor at the Centre for Education in Economics and Finance Africa (CEEF Arica), South Africa, supporting students at the University of London in degrees and diplomas in Economics and Finance. Her research areas of interest include monetary economics, macro-economics, international economics and finance, fiscal policy, banking regulation and macro prudential policy.

Bibliographic information

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