n African Finance Journal - Monetary policy action and inflation in South Africa : an empirical analysis
|Article Title||Monetary policy action and inflation in South Africa : an empirical analysis|
|© Publisher:||AfricaGrowth Institute|
|Journal||African Finance Journal|
|Affiliations||1 University of Johannesburg and 2 University of Johannesburg|
|Publication Date||Jan 2011|
|Pages||25 - 37|
This paper examines the impact of the monetary policy instrument, the repo rate, mainly on output gap and inflation rate in South Africa, over the period 1998-2008. Use is made of a simple structural vector autoregressive (SVAR) framework in assessing the impulse response functions (IRFs) of output gap and inflation rate to monetary policy shocks. The VAR includes output gap, rather than output, to control for the price puzzle. The results of the IRFs show that monetary policy instrument, the repo rate, did not impact on inflation in South Africa over the sample period covered by the paper.
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