Modelling Inflation In South Africa: A Multivariate Cointegration Analysis
AbstractWe employ an expectations augmented Phillips curve framework to investigate the link between inflation, unit labour costs, the output gap, the real exchange rate and inflation expectations. Using multivariate cointegration techniques, we find evidence consistent with mark-up behaviour of output prices over unit labour costs. Most importantly, we find that the mark-up in the South African economy is much higher than in the U.S. For South Africa we find a markup of about 30 per cent: three times as high as the 10 per cent markup found for the U.S. Copyright 2005 Economic Society of South Africa.
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Bibliographic InfoArticle provided by Economic Society of South Africa in its journal South African Journal of Economics.
Volume (Year): 73 (2005)
Issue (Month): 1 (03)
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- Monique Reid & Gideon du Rand, 2013. "A sticky information Phillips curve for South Africa," Working Papers 22/2013, Stellenbosch University, Department of Economics.
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