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

This study investigates whether the South African inflation-targeting (IT) framework has performed the role of the nominal anchor and the process through which the monetary authority determines its instrument in the economy. The study employs generalised method of moments (GMM) estimators. The resul...

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Main Authors: Umar, Mohammed, Dahalan, Jauhari, Azman Aziz, Mukhriz Izraf
Format: Article
Published: Inderscience Enterprises Ltd. 2016
Subjects:
HC Economic History and Conditions
Online Access:http://repo.uum.edu.my/27809/
http://doi.org/10.1504/IJMEF.2016.080082
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spelling my.uum.repo.278092020-11-01T01:44:28Z http://repo.uum.edu.my/27809/ The South African monetary policy and inflation targeting as a nominal anchor: Does the monetary policy become more effective? Umar, Mohammed Dahalan, Jauhari Azman Aziz, Mukhriz Izraf HC Economic History and Conditions This study investigates whether the South African inflation-targeting (IT) framework has performed the role of the nominal anchor and the process through which the monetary authority determines its instrument in the economy. The study employs generalised method of moments (GMM) estimators. The results of the post-IT adoption and full sample periods are characterised by forward-looking IT rule. Furthermore, the paper uses the augmented monetary policy rule to identify the factors that determine the monetary policy instrument for South Africa. The results confirm that the South African monetary economy practised full-fledged IT principle immediately after the adoption of the IT framework and the monetary policy rule serves as a nominal anchor for the economy. The policy implication is that for South Africa to continue keeping inflation to the required single-digit target, the Reserve Bank should further strengthen the IT framework adopted in the economy. Inderscience Enterprises Ltd. 2016 Article PeerReviewed Umar, Mohammed and Dahalan, Jauhari and Azman Aziz, Mukhriz Izraf (2016) The South African monetary policy and inflation targeting as a nominal anchor: Does the monetary policy become more effective? International Journal of Monetary Economics and Finance, 9 (4). p. 401. ISSN 1752-0479 http://doi.org/10.1504/IJMEF.2016.080082 doi:10.1504/IJMEF.2016.080082
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutional Repository
url_provider http://repo.uum.edu.my/
topic HC Economic History and Conditions
spellingShingle HC Economic History and Conditions
Umar, Mohammed
Dahalan, Jauhari
Azman Aziz, Mukhriz Izraf
The South African monetary policy and inflation targeting as a nominal anchor: Does the monetary policy become more effective?
description This study investigates whether the South African inflation-targeting (IT) framework has performed the role of the nominal anchor and the process through which the monetary authority determines its instrument in the economy. The study employs generalised method of moments (GMM) estimators. The results of the post-IT adoption and full sample periods are characterised by forward-looking IT rule. Furthermore, the paper uses the augmented monetary policy rule to identify the factors that determine the monetary policy instrument for South Africa. The results confirm that the South African monetary economy practised full-fledged IT principle immediately after the adoption of the IT framework and the monetary policy rule serves as a nominal anchor for the economy. The policy implication is that for South Africa to continue keeping inflation to the required single-digit target, the Reserve Bank should further strengthen the IT framework adopted in the economy.
format Article
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 South African monetary policy and inflation targeting as a nominal anchor: Does the monetary policy become more effective?
title_short The South African monetary policy and inflation targeting as a nominal anchor: Does the monetary policy become more effective?
title_full The South African monetary policy and inflation targeting as a nominal anchor: Does the monetary policy become more effective?
title_fullStr The South African monetary policy and inflation targeting as a nominal anchor: Does the monetary policy become more effective?
title_full_unstemmed The South African monetary policy and inflation targeting as a nominal anchor: Does the monetary policy become more effective?
title_sort south african monetary policy and inflation targeting as a nominal anchor: does the monetary policy become more effective?
publisher Inderscience Enterprises Ltd.
publishDate 2016
url http://repo.uum.edu.my/27809/
http://doi.org/10.1504/IJMEF.2016.080082
_version_ 1683233086174658560
score 13.211869

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