dc.contributor.author |
Uwilingiye, Josine
|
|
dc.contributor.upauthor |
Gupta, Rangan
|
|
dc.date.accessioned |
2008-09-17T12:17:50Z |
|
dc.date.available |
2008-09-17T12:17:50Z |
|
dc.date.issued |
2008-06 |
|
dc.description.abstract |
In this paper, using the Fisher and Seater (1993) long-horizon approach, we estimate the long-run
equilibrium relationship between money balance as a ratio of income and the Treasury bill rate for
South Africa over the period of 1965:02 to 2007:01, and, in turn, use the obtained estimates of the
interest elasticity and the semi-elasticity to derive the welfare cost estimates of inflation, using both
Bailey’s (1956) consumer surplus approach, as well, as Lucas’s (2000) compensating variation
approach. When, the results are compared to welfare cost estimates obtained recently by Gupta and
Uwilingiye (2008), using the same data set, but based on Johansen’s (1991, 1995) cointegration
technique, the values are less by more than half in size than those obtained in the latter study, with
the same being utmost ranging between 0.16 percent to 0.36 percent of GDP for the target-band of 3
percent to 6 percent of inflation. The paper, thus, highlights the fact that welfare cost estimates of
inflation are sensitive to the methodology used to estimate the long-run equilibrium money demand
relationships. |
en_US |
dc.identifier.citation |
Gupta, R & Uwilingiye, J 2008, 'Measuring the welfare cost of inflation in South Africa: a reconsideration', University of Pretoria, Department of Economics, Working paper series, no. 2008-09. [http://web.up.ac.za/default.asp?ipkCategoryID=736&sub=1&parentid=677&subid=729&ipklookid=3] |
en_US |
dc.identifier.uri |
http://hdl.handle.net/2263/7179 |
|
dc.language.iso |
en |
en_US |
dc.publisher |
University of Pretoria, Department of Economics |
en_US |
dc.relation.ispartofseries |
Working Paper (University of Pretoria, Department of Economics) |
en_US |
dc.relation.ispartofseries |
2008-09 |
en_US |
dc.rights |
University of Pretoria, Department of Economics |
en_US |
dc.subject |
Long-horizon regression |
en_US |
dc.subject |
Money demand |
en_US |
dc.subject |
Welfare cost of inflation |
en_US |
dc.subject |
Cointegration |
en_US |
dc.subject.lcsh |
Inflation (Finance) -- South Africa |
en |
dc.title |
Measuring the welfare cost of inflation in South Africa : a reconsideration |
en_US |
dc.type |
Working Paper |
en_US |