2016, Volume 69 - Issue 2
RSS feed citation: at CitEc
Publication date: 06 May 2016
THE NONPARAMETRIC RELATIONSHIP BETWEEN OIL AND SOUTH AFRICAN AGRICULTURAL PRICESRead the article
A THEORETICAL MODEL OF REMITTANCES WITH APPLICATIONSRead the article
EXCHANGE RATE PASS-THROUGH (ERPT) AND INFLATION TARGETING (IT): EVIDENCE FROM SOUTH AFRICARead the article
Smile DUBE, Department of Economics, California State University Sacramento, CA, USA
We use an ARDL model to estimate the short-run and the long-run effects of depreciation on consumer and producer prices. We find for price indices, foreign prices are only cointegrated when consumer and producer inflation are the dependent variable. Although economic theory suggests output as a proxy for domestic demand conditions, we find the output variable (measured in many ways) insignificant and thus it is not reported.
The results show that ERPT has declined significantly for producer inflation but not for consumer inflation after the adoption of IT. However, the reduction in ERPT is higher for producer prices than consumer prices. The lack of a significant decline of consumer inflation with ERPT during the period associated with targeting inflation opens the monetary policy debate to alternative monetary policy goals discussed briefly in the paper.
C22, E44, F31, F43, O11
IT, ERPT, ARDL, Granger Causality, CPIX, Headline Inflation, PPI, Monetary Policy, DEIT, PITE
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