Monetary Policy, Disposable Income and Consumption

Mthuli Ncube () and Eliphas Ndou

Chapter 5 in Monetary Policy and the Economy in South Africa, 2013, pp 65-82 from Palgrave Macmillan

Abstract: Abstract Chapter 4 discussed the relevance of the indirect channel of housing wealth in explaining decreasing consumption according to four categories of housing. The findings concluded that the indirect channel is less important than the direct channel, and that effects varied according to house size. This chapter includes disposable income and four consumption categories: non-durable, durable, semi-durable and total consumption goods (the latter including effects of oil prices). Furthermore, we look at scenarios related to what would have happened to consumption levels had disposable income remained at levels observed in 2004 and 2007. This corresponds to periods when interest rate were at low and high levels respectively. The chapter uses the corresponding values of disposable income at these time periods in counterfactual analysis.

Keywords: Interest Rate; Monetary Policy; House Price; Disposable Income; Housing Wealth (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-33415-2_5

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DOI: 10.1057/9781137334152_5

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