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Food Inflation In South Africa: Some Implications For Economic Policy

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  • LOGAN RANGASAMY

Abstract

The paper identifies some macroeconomic and policy implications arising from food inflation in South Africa. There are three main results emanating from the analysis in this paper. Firstly, food price movements have played a large role in generating inflationary episodes in South Africa. Secondly, while external influences do matter, South African food price movements are mainly due to domestic influences. This implies that national policy has an important role to play in taming domestic food price inflation. Thirdly, given the strong second-round impacts, food price movements warrant special attention in monetary policymaking. Core measures of inflation that exclude food price movements may not accurately reflect the underlying inflationary pressures in the economy and could compromise the attainment of the goal of price stability.
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Suggested Citation

  • Logan Rangasamy, 2011. "Food Inflation In South Africa: Some Implications For Economic Policy," South African Journal of Economics, Economic Society of South Africa, vol. 79(2), pages 184-201, June.
  • Handle: RePEc:bla:sajeco:v:79:y:2011:i:2:p:184-201
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    Cited by:

    1. Franz Ruch & Stan du Plessis, 2015. "Working Paper – WP/15/05- Second-Round Effects from Food and Energy Prices- an SBVAR approach," Working Papers 7008, South African Reserve Bank.
    2. Snežana Radukić & Milan Marković & Milica Radović, 2015. "The Effect of Food Prices on Inflation in the Republic of Serbia," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 4(2), pages 23-36.
    3. Stan Plessis & Gideon Rand & Kevin Kotzé, 2015. "Measuring Core Inflation in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 83(4), pages 527-548, December.
    4. Stan du Plessis, 2014. "Targeting core inflation in emerging market economies," Working Papers 23/2014, Stellenbosch University, Department of Economics.
    5. Emre Alper & Niko A Hobdari & Ali Uppal, 2016. "Food Inflation in Sub-Saharan Africa; Causes and Policy Implications," IMF Working Papers 16/247, International Monetary Fund.
    6. Stan du Plessis, Gideon du Rand & Kevin Kotzé, 2015. "Measuring Core Inflation in South Africa," Working Papers 503, Economic Research Southern Africa.
    7. Misati, Roseline Nyakerario & Munene, Olive, 3. "Second Round Effects And Pass-Through Of Food Prices To Inflation In Kenya," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3(3).
    8. Aye, Goodness C., 2016. "Causality between Oil Price and South Africa's Food Price: Time Varying Approach - Relazione di causalità tra prezzo del petrolio e pr ezzo dei prodotti alimentari in Sud Africa: un approccio time var," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 69(3), pages 193-212.

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