Should the South African Reserve Bank respond to exchange rate fluctuations? Evidence from the cosine-squared cepstrum

dc.contributor.authorGupta, Rangan
dc.contributor.emailrangan.gupta@up.ac.zaen_ZA
dc.date.accessioned2015-02-19T12:10:31Z
dc.date.available2015-02-19T12:10:31Z
dc.date.issued2013
dc.description.abstractEmpirical evidence on the whether the inflation targeting South African Reserve Bank (SARB) should also consider responding to exchange rate fluctuations are contradictory. We revisit the issue by questioning if inflation rate is more volatile than it would have been had South Africa not moved to a flexible exchange rate regime in 1995, using the cosine squared cepstrum. We find that CPI inflation in South Africa has become more volatile since the second quarter of 1995, post a flexible exchange rate regime, than it would have been had the country continued to pursue a fixed exchange rate policy. Based on this result, we can conclude that the SARB should perhaps respond to exchange rate fluctuations, however, we also warn against the cost of increased volatility in output that is likely to result from targeting exchange rate variability.en_ZA
dc.description.librarianhb2015en_ZA
dc.description.urihttp://eco-science.net/index.php?action_skin_change=yes&skin_name=APE_engen_ZA
dc.identifier.citationGupta, R 2013, 'Should the South African Reserve Bank respond to exchange rate fluctuations? Evidence from the cosine-squared cepstrum', Actual Problems of Economics, vol. 124, pp. 198-206.en_ZA
dc.identifier.issn1993-6788 (print)
dc.identifier.urihttp://hdl.handle.net/2263/43731
dc.language.isoenen_ZA
dc.publisherNational Academy of Managementen_ZA
dc.rightsNational Academy of Managementen_ZA
dc.subjectCosine squared cepstrumen_ZA
dc.subjectExchange rate regimeen_ZA
dc.subjectInflation targetingen_ZA
dc.subjectInflation volatilityen_ZA
dc.subjectOutput volatilityen_ZA
dc.subjectSaphe crackingen_ZA
dc.subjectSouth African Reserve Bank (SARB)en_ZA
dc.titleShould the South African Reserve Bank respond to exchange rate fluctuations? Evidence from the cosine-squared cepstrumen_ZA
dc.typeArticleen_ZA

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