IDEAS home Printed from https://ideas.repec.org/h/spr/sprchp/978-3-030-66340-7_31.html
   My bibliography  Save this book chapter

Does Economic Policy Uncertainty Impact Real Money Demand in South Africa?

In: Achieving Price, Financial and Macro-Economic Stability in South Africa

Author

Listed:
  • Nombulelo Gumata

    (South African Reserve Bank)

  • Eliphas Ndou

    (South African Reserve Bank)

Abstract

Does economic policy uncertainty impact real money demand in South Africa? Evidence reveals that elevated economic policy uncertainty lowers real money demand and that the credit conditions channel and inflation regimes matter for the transmission of such shocks. The results show that inflation declines due to positive economic policy uncertainty shocks when inflation is below 6 per cent and especially when it is below 4.5 per cent. Inflation also declines when considering the effects of the nominal effective exchange rate depreciation shocks, suggesting that the exchange rate pass-through to inflation is weaker in low-inflation regimes. In addition, positive policy uncertainty shocks tighten credit conditions and lower GDP growth, and these effects assist in attaining price stability especially when inflation is below 6 per cent. Hence, inflation regimes matter for the transmission of economic policy uncertainty shocks to money demand.

Suggested Citation

  • Nombulelo Gumata & Eliphas Ndou, 2021. "Does Economic Policy Uncertainty Impact Real Money Demand in South Africa?," Springer Books, in: Achieving Price, Financial and Macro-Economic Stability in South Africa, chapter 0, pages 465-472, Springer.
    • Handle: RePEc:spr:sprchp:978-3-030-66340-7_31
    DOI: 10.1007/978-3-030-66340-7_31
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sprchp:978-3-030-66340-7_31. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.