A comparison of inflation expectations and inflation credibility in South Africa : results from survey data

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Authors

Rossouw, Jannie
Padayachee, Vishnu
Bosch, Adel

Journal Title

Journal ISSN

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Publisher

University of Pretoria

Abstract

This paper reports a comparison of South African household inflation expectations and inflation credibility surveys undertaken in 2006 and 2008. It tests for possible feed-through between inflation credibility and inflation expectations. It supplements earlier research that focused only on the 2006 survey results. The comparison shows that inflation expectations differed between different income groups in both 2006 and 2008. Inflation credibility differed between male and female respondents, but this difference did not feed through to inflation expectations. More periodic survey data will be required for developing final conclusions on the possibility of feedthrough effects. To this end the structure of credibility surveys should be reconsidered, as a large percentage of respondents indicated that they ‘don’t know’ whether the historic rate of inflation is an accurate indication of price increases.

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Keywords

Inflation credibility, Inflation expectations, Inflation surveys, Multinomial analysis

Sustainable Development Goals

Citation

Rossouw, J, Padayachee, V & Bosch, A 2011, 'A comparison of inflation expectations and inflation credibility in South Africa : results from survey data', South African Journal of Economic and Management Sciences, vol. 14, no. 3, pp. 263-281.