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Exchange Rate Pass-through in South Africa: Panel Evidence from Individual Goods and Services

  • David C. Parsley

This study estimates pass-through for South Africa using samples of final goods and services, and homogenous imports. Estimated pass-through to consumer goods prices is low, roughly 16 per cent in the two years following an exchange rate change; surprisingly, it is somewhat higher for services. Deviations from long run PPP appear to disappear relatively quickly, with a half-life of about 16 months. For imports, pass-through estimates are much higher, averaging around 60 per cent, but with wide source-country variation. Finally, there is virtually no support for a simple linear trend change in either pass-through or in reversion to PPP during the sample.

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Article provided by Taylor & Francis Journals in its journal Journal of Development Studies.

Volume (Year): 48 (2012)
Issue (Month): 7 (January)
Pages: 832-846

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Handle: RePEc:taf:jdevst:v:48:y:2012:i:7:p:832-846
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