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Inflation dynamics in an emerging market: The case of South Africa

Author

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  • Dladla, Pholile
  • Malikane, Christopher
Abstract
The literature on the Phillips curve in South Africa finds little evidence of the effect of demand pressure on the inflation rate. Using quarterly data from 1960–2020, this paper shows that the Phillips curve exists in South Africa and the coefficient that relates the level of economic activity and inflation has been remarkably stable since the 1970s. We argue that the findings in the literature are due to mis-specification of the Phillips curve relationship and the inadequate consideration of key political events that shocked the South African labour market in the 1970s.

Suggested Citation

  • Dladla, Pholile & Malikane, Christopher, 2022. "Inflation dynamics in an emerging market: The case of South Africa," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 262-271.
    • Handle: RePEc:eee:ecanpo:v:73:y:2022:i:c:p:262-271
    DOI: 10.1016/j.eap.2021.11.016
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    References listed on IDEAS

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    More about this item

    Keywords

    Inflation; Phillips curves; Backward-looking behaviour;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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