TY - JOUR
T1 - Modelling inflation in South Africa
T2 - A multivariate cointegration analysis
AU - Fedderke, J. W.
AU - Schaling, E.
N1 - Copyright:
Copyright 2017 Elsevier B.V., All rights reserved.
PY - 2005/3
Y1 - 2005/3
N2 - We employ an expectations augmented Phillips curve framework to investigate the link between inflation, unit labour costs, the output gap, the real exchange rate and inflation expectations. Using multivariate cointegration techniques, we find evidence consistent with mark-up behaviour of output prices over unit labour costs. Most importantly, we find that the mark-up in the South African economy is much higher than in the U.S. For South Africa we find a markup of about 30 per cent: three times as high as the 10 per cent markup found for the U.S.
AB - We employ an expectations augmented Phillips curve framework to investigate the link between inflation, unit labour costs, the output gap, the real exchange rate and inflation expectations. Using multivariate cointegration techniques, we find evidence consistent with mark-up behaviour of output prices over unit labour costs. Most importantly, we find that the mark-up in the South African economy is much higher than in the U.S. For South Africa we find a markup of about 30 per cent: three times as high as the 10 per cent markup found for the U.S.
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U2 - 10.1111/j.1813-6982.2005.00006.x
DO - 10.1111/j.1813-6982.2005.00006.x
M3 - Article
AN - SCOPUS:23844493420
SN - 0038-2280
VL - 73
SP - 79
EP - 92
JO - South African Journal of Economics
JF - South African Journal of Economics
IS - 1
ER -