The long-run impact of inflation in South Africa
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Date
Authors
Amusa, Kafayat
Gupta, Rangan
Karolia, Shaakira
Simo-Kengne, Beatrice Desiree
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier
Abstract
This paper evaluates the hypothesis of long-run super-neutrality of money (LRSN) within the context of the South
African economy. The long-run impact of inflation on the interest rate and subsequently, output is estimated by
employing a trivariate structural vector autoregression model, using quarterly data for the period of 1960:1 to
2010:1. The estimation results suggest that the hypothesis of LRSN cannot be rejected, thereby suggesting that
monetary policy in South Africa cannot be used to solve the large and persistent unemployment problem in South
Africa, which is understandable, since unemployment is inherently structural and is due to skills-shortage. This is
further supported by our one of our other results which shows that significant long-run impact on output is obtained
from technological improvements.
Description
Keywords
Money superneutrality, Structural vector autoregression
Sustainable Development Goals
Citation
Amusa, K, Gupta, R, Karolia, S & Simo-Kengne, BD 2013, 'The long-run impact of inflation in South Africa', Journal of Policy Modeling, vol. 35, no. 5, pp. 798-812.