dc.contributor.author |
Gupta, Rangan
|
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dc.contributor.author |
Uwilingiye, Josine
|
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dc.date.accessioned |
2008-05-21T09:31:59Z |
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dc.date.available |
2008-05-21T09:31:59Z |
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dc.date.issued |
2008-03 |
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dc.description.abstract |
In this paper, we estimate the long-run equilibrium relationship between money balance as a ratio
of income and the Treasury bill rate for the period of 1965:02 to 2007:01, and in turn use the
relationship to obtain welfare cost estimates of inflation. Using the Johansen technique, we
estimate a log-log specification and a semi-log model of the above relationship. Based on the fits
of the specifications, we decided to rely more on the welfare cost measure obtained under the
log-log money demand model. Our estimates suggest that the welfare cost of inflation for South
Africa ranges between 0.34% and 0.67% of GDP, for a band of 3-6% of inflation. Thus, it seems
that the South African Reserve Bank’s current inflation target band of 3-6% is not too poorly
designed in terms of welfare. |
en |
dc.format.extent |
357097 bytes |
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dc.format.mimetype |
application/pdf |
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dc.identifier.citation |
Gupta, R & Uwilingiye, J 2008, 'Measuring the welfare cost of inflation in South Africa', The South African Journal of Economics, vol. 76, no. 1, pp. 16-25. [http://www.blackwellpublishing.com/journal.asp?ref=0038-2280&site=2] |
en |
dc.identifier.issn |
0038-2280 |
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dc.identifier.other |
10.1111/j.1813-6982.2008.00159.x |
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dc.identifier.uri |
http://hdl.handle.net/2263/5407 |
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dc.language.iso |
en |
en |
dc.publisher |
Blackwell |
en |
dc.rights |
The definitive version is available at www.blackwell-synergy.com |
en |
dc.subject |
Cointegration |
en |
dc.subject |
Money demand |
en |
dc.subject |
Welfare cost of inflation |
en |
dc.subject.lcsh |
Inflation (Finance) -- South Africa |
en |
dc.title |
Measuring the welfare cost of inflation in South Africa |
en |
dc.type |
Postprint Article |
en |