Inflation targeting and exchange rate pass-through to domestic prices: evidence from South Africa

Oluwasheyi Oladipo (oladipos@oldwestbury.edu)
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Oluwasheyi Oladipo: SUNY College at Old Westbury, United States

Journal of Economic and Financial Studies (JEFS), 2017, vol. 5, issue 5, 1-11

Abstract: Inflation targeting is increasingly seen as a crucial monetary policy by many economies in their quest for economic growth. The choice of an appropriate exchange rate regime, continue to be crucial in macroeconomic policy. Using data from 1970q1 to 2015q4, the paper examines the effects of inflation targeting on exchange rate pass-through. Applying a VAR model, the results show that inflation targeting has significant impacts on the movements of inflation, output and the exchange rate. The pass-through to consumer prices decreased and there was a reduction in the influence of foreign producer costs on imports prices after adopting inflation targeting Classification JEL: B22; F41; N00

Keywords: Inflation targeting; Pass-throughPrices; Exchange rate. (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:lrc:lareco:v:5:y:2017:i:5:p:1-11

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