Our findings present enormous policy and welfare implications, giventhe inflation targeting status of South Africa and the economic disparities among the provinces of thecountry.
📌 3 Key Takeaways
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Objective & Hypothesis:Although economic agents in different parts of a country face heterogeneous prices, empirical literaturecontinue to assume homogeneity in the monetary policy-inflation nexus, with dire consequences foroptimal monetary policy and welfare.
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Key Findings & Data:Using wavelet-based quantile regressions, we provide a multilayeredasymmetric exposition on provincial inflation-monetary policy relationship in South Africa.We find that whiles restrictive monetary policy delivers stability in the prices of Gauteng, Mpumalangaand North West provinces, it is destabilizing for prices in Eastern Cape, KwaZulu-Natal, Limpopo,Northern Cape and Western Cape provinces.
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Conclusion & Impact:Our findings present enormous policy and welfare implications, giventhe inflation targeting status of South Africa and the economic disparities among the provinces of thecountry.
🔬Design:Research Article
📍Scope:Comprehensive Sample
⚙️Variables:Domain Parameters
Özet
Although economic agents in different parts of a country face heterogeneous prices, empirical literaturecontinue to assume homogeneity in the monetary policy-inflation nexus, with dire consequences foroptimal monetary policy and welfare. Using wavelet-based quantile regressions, we provide a multilayeredasymmetric exposition on provincial inflation-monetary policy relationship in South Africa.We find that whiles restrictive monetary policy delivers stability in the prices of Gauteng, Mpumalangaand North West provinces, it is destabilizing for prices in Eastern Cape, KwaZulu-Natal, Limpopo,Northern Cape and Western Cape provinces. The findings are mixed, for Free State province, dependingon the time horizon and quantiles. Our findings present enormous policy and welfare implications, giventhe inflation targeting status of South Africa and the economic disparities among the provinces of thecountry.
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Cite This Article
IDDRİSU, A. A., ALAGİDEDE, I. P. (2021). Heterogeneous provincial prices and monetary policy in South Africa: A wavelet-based quantile regression analysis. Central Bank Review, Cilt: 21 - Sayı: 3, 87–103. https://ajindex.com/articles/415028
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