As inflation credibility in South Africa records low readings when measured in terms of inflation
credibility barometers, this note aims at assessing whether actual price movements provide any
grounds for low inflation credibility. It compares the price movements of similar items with the
rate of inflation over a period of 32 years, i.e. from 1974 to 2006, and discusses the use of an
inflation accuracy indicator to compare estimated price levels adjusted by the rate of inflation
and actual price levels. Over the period of comparison no systematic over- or under-reporting of
changes in prices in terms of the rate of inflation could be detected and the analysis suggests that
little or no basis can be found to justify low inflation credibility. Inflation credibility is more likely
than not influenced by the most recent purchasing experiences of consumers. Doubts concerning
the accuracy of inflation figures could nevertheless result in the general public concluding that
monetary policy aiming at the achievement of an inflation target brings only the pain of high
interest rates without the tangible benefits of lower inflation, thereby jeopardising the usefulness
of an inflation-targeting monetary policy framework.
Rossouw, Jannie(University of Pretoria, 2008-08-15)
Please note: This degree was awarded by the University of Kwazulu-Natal. Permission was granted to archive it in this database for teaching purposes.This study reports the development and use of an original methodology to ...
This article proposes a Bayesian regression model for nonlinear zero-inflated longitudinal count data that models the median count as an alternative to the mean count. The nonlinear model generalizes a recently introduced ...
Rossouw, Jannie; Padayachee, Vishnu; Bosch, Adel(University of Pretoria, 2011-05)
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