 Monetary policy developments and the minerals industryMPRA Paper from University Library of Munich, Germany Abstract: This study analyses the reaction of the minerals industry to monetary policy developments in South Africa. This is achieved using a Taylor rule type central bank monetary policy reaction function, where the total, or economy wide, output is substituted with output of the minerals industry. The reaction of the minerals industry to monetary developments is then compared to the standard monetary policy reaction function with economy wide output. The results show that, following an increase in monetary policy interest rate, output of the minerals industry begins to decrease after 4 months and bottoms out after 8 months, following which it progressively increases and gradually tends towards its equilibrium, or steady state, level. Output of the minerals industry only becomes statistically significant after 6 months and remains statistically significant up to 15 months following the surprise increase in the central bank monetary policy interest rate. The study, therefore, concludes that the central bank monetary policy interest rate has an important role in management and stabilisation of economic activity and the minerals industry. Keywords: Monetary policy; Minerals industry; Economic cycles (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:123004 Access Statistics for this paper More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC. |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.