Imported Inflation in South Africa: An Empirical Study

Kevin Nell

Studies in Economics from School of Economics, University of Kent

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.

Keywords: Imported inflation; Import Pass-through; Exchange rate; Phillips curve (search for similar items in EconPapers)
JEL-codes: C22 E24 E31 (search for similar items in EconPapers)
Date: 2000-05
New Economics Papers: this item is included in nep-ifn
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Citations: View citations in EconPapers (8)

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