EconPapers    
Economics at your fingertips  
 

STRUCTURAL CHANGE AND NONLINEARITIES IN A PHILLIPS CURVE MODEL FOR SOUTH AFRICA

Kevin Nell ()

Contemporary Economic Policy, 2006, vol. 24, issue 4, 600-617

Abstract: The main objective of this article is to reexamine the role of the Phillips curve for monetary policy analysis in South Africa by augmenting the model for major structural changes in the balance‐of‐payments and labor market. The main findings show that a linear Phillips curve with an output gap in levels accurately describes South Africa's nontrended inflation experience during 1971(Q1)–1984(Q4), whereas a piecewise concave curve with an output gap in growth rates correctly predicts the decelerating inflation pattern during 1986(Q1)–2001(Q2). The concave curve after 1985 imparts a deflationary bias that requires expansionary demand‐side policies to stabilise the inflation rate. An important corollary is that expansionary demand‐side policies can raise the average growth rate of the output gap over time without sacrificing stabilization objectives. (JEL C22, E3, E52)

Date: 2006
References: Add references at CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1093/cep/byl004

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:coecpo:v:24:y:2006:i:4:p:600-617

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1074-3529

Access Statistics for this article

Contemporary Economic Policy is currently edited by Brad R. Humphreys

More articles in Contemporary Economic Policy from Western Economic Association International Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2021-05-12
Handle: RePEc:bla:coecpo:v:24:y:2006:i:4:p:600-617