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The inflation targeting as a nominal anchor in South African monetary policy: Does the monetary policy becomes more effective?

The paper investigates whether the South African Inflation Targeting (IT) framework has performed the role of the nominal anchor in the economy or not as well as the process through which the monetary authority determine its monetary instrument in the economy. Using the Generalized Method of Moments...

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Main Authors: Umar, Mohammed, Dahalan, Jauhari, Azman Aziz, Mukhriz Izraf
Format: Conference or Workshop Item
Language:English
Published: 2015
Subjects:
HJ Public Finance
Online Access:http://repo.uum.edu.my/15493/1/2.pdf
http://repo.uum.edu.my/15493/
http://sibresearch.org/sibr-conference-call-for-paper.html
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spelling my.uum.repo.154932016-04-17T03:46:33Z http://repo.uum.edu.my/15493/ The inflation targeting as a nominal anchor in South African monetary policy: Does the monetary policy becomes more effective? Umar, Mohammed Dahalan, Jauhari Azman Aziz, Mukhriz Izraf HJ Public Finance The paper investigates whether the South African Inflation Targeting (IT) framework has performed the role of the nominal anchor in the economy or not as well as the process through which the monetary authority determine its monetary instrument in the economy. Using the Generalized Method of Moments (GMM) estimators, the baseline and augmented forward-looking monetary policy rules were estimated for the pre, post-IT adoption and full sample periods. The findings vary across regimes.The result prior to the adoption of the IT framework does not follow the IT principles, whereas that of the post IT adoption and full sample periods are characterized as a forward-looking IT rule.The paper further uses the augmented monetary policy rule to identify the factors that determine the monetary policy instrument in South Africa.The results confirm that the South African monetary economy practiced full-pledged IT principle immediately after the adoption of the IT framework and that the monetary policy rule serve as a nominal anchor for the South African economy.The policy implication is that the South African Reserve Bank should further strengthen the IT framework adopted in the economy in order to continue keeping inflation to the required single digit target. 2015-06-04 Conference or Workshop Item NonPeerReviewed application/pdf en http://repo.uum.edu.my/15493/1/2.pdf Umar, Mohammed and Dahalan, Jauhari and Azman Aziz, Mukhriz Izraf (2015) The inflation targeting as a nominal anchor in South African monetary policy: Does the monetary policy becomes more effective? In: SIBR 2015 Conference on Interdisciplinary Business and Economics Research, June 04, 2015 - June 06, 2015, Emerald Hotel, Bangkok, Thailand. (Unpublished) http://sibresearch.org/sibr-conference-call-for-paper.html
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HJ Public Finance
spellingShingle HJ Public Finance
Umar, Mohammed
Dahalan, Jauhari
Azman Aziz, Mukhriz Izraf
The inflation targeting as a nominal anchor in South African monetary policy: Does the monetary policy becomes more effective?
description The paper investigates whether the South African Inflation Targeting (IT) framework has performed the role of the nominal anchor in the economy or not as well as the process through which the monetary authority determine its monetary instrument in the economy. Using the Generalized Method of Moments (GMM) estimators, the baseline and augmented forward-looking monetary policy rules were estimated for the pre, post-IT adoption and full sample periods. The findings vary across regimes.The result prior to the adoption of the IT framework does not follow the IT principles, whereas that of the post IT adoption and full sample periods are characterized as a forward-looking IT rule.The paper further uses the augmented monetary policy rule to identify the factors that determine the monetary policy instrument in South Africa.The results confirm that the South African monetary economy practiced full-pledged IT principle immediately after the adoption of the IT framework and that the monetary policy rule serve as a nominal anchor for the South African economy.The policy implication is that the South African Reserve Bank should further strengthen the IT framework adopted in the economy in order to continue keeping inflation to the required single digit target.
format Conference or Workshop Item
author Umar, Mohammed
Dahalan, Jauhari
Azman Aziz, Mukhriz Izraf
author_facet Umar, Mohammed
Dahalan, Jauhari
Azman Aziz, Mukhriz Izraf
author_sort Umar, Mohammed
title The inflation targeting as a nominal anchor in South African monetary policy: Does the monetary policy becomes more effective?
title_short The inflation targeting as a nominal anchor in South African monetary policy: Does the monetary policy becomes more effective?
title_full The inflation targeting as a nominal anchor in South African monetary policy: Does the monetary policy becomes more effective?
title_fullStr The inflation targeting as a nominal anchor in South African monetary policy: Does the monetary policy becomes more effective?
title_full_unstemmed The inflation targeting as a nominal anchor in South African monetary policy: Does the monetary policy becomes more effective?
title_sort inflation targeting as a nominal anchor in south african monetary policy: does the monetary policy becomes more effective?
publishDate 2015
url http://repo.uum.edu.my/15493/1/2.pdf
http://repo.uum.edu.my/15493/
http://sibresearch.org/sibr-conference-call-for-paper.html
_version_ 1644281730314534912
score 13.211869

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