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Imported Inflation in South Africa: An Empirical Study

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  • Kevin Nell

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Abstract

The main objective of this paper is to analyse the inflationary impact of exchange rate depreciation in South Africa over the period 1984-1998 when the monetary authorities adopted a more market-oriented exchange rate system. Although the empirical part of the paper extensively focuses on this period, the analysis also concentrates on the period 1973-1983 to determine whether the underlying causes of inflation have changed following significant structural, political and institutional changes. From a macroeconomic perspective, the empirical results show that the long-run causes of inflation in South Africa have changed from a demand-pull inflation over the period 1973-1983, to a cost-push cause (import prices and wage rate changes) of inflation since 1987 when a market determined exchange rate finally stabilised.

Suggested Citation

  • Kevin Nell, 2000. "Imported Inflation in South Africa: An Empirical Study," Studies in Economics 0005, School of Economics, University of Kent.
  • Handle: RePEc:ukc:ukcedp:0005
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    References listed on IDEAS

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    Cited by:

    1. Lawrence Edwards & Robert Lawrence, 2006. "South African Trade Policy Matters: Trade Performance & Trade Policy," CID Working Papers 135, Center for International Development at Harvard University.
    2. repec:lrc:lareco:v:5:y:2017:i:5:p:1-11 is not listed on IDEAS
    3. Lawrence Edwards & Robert Z. Lawrence, 2006. "South African Trade Policy Matters: Trade Performance and Trade Policy," NBER Working Papers 12760, National Bureau of Economic Research, Inc.
    4. Tapiwa d. Karoro & Meshach j. Aziakpono & Nicolette Cattaneo, 2009. "Exchange Rate Pass-Through To Import Prices In South Africa: Is There Asymmetry?," South African Journal of Economics, Economic Society of South Africa, vol. 77(3), pages 380-398, September.
    5. repec:spt:admaec:v:7:y:2017:i:6:f:7_6_4 is not listed on IDEAS
    6. Edwards, Lawrence J & Garlick, Robert, 2008. "Trade flows and the exchange rate in South Africa," MPRA Paper 36666, University Library of Munich, Germany.

    More about this item

    Keywords

    Imported inflation; Import Pass-through; Exchange rate; Phillips curve;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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