Asymmetries in the effects of monetary policy: the case of South Africa

Shields, Kalvinder; Fielding, David

Asymmetries in the effects of monetary policy: the case of South Africa

Fielding, David; Shields, Kalvinder

Cite this item: Fielding, D., & Shields, K. (2005). Asymmetries in the effects of monetary policy: the case of South Africa (Economics Discussion Papers Series No. 509). University of Otago. Retrieved from http://hdl.handle.net/10523/1107

Permanent link to OUR Archive version: http://hdl.handle.net/10523/1107

Date: 2005-08

Publisher: University of Otago

Pages: 18

Series: Economics Discussion Papers Series

Series number: 509

Keywords: monetary union; South Africa; transmission mechanism; Inflation

Research Type: Discussion Paper

Abstract:

PPP is unlikely to hold instantaneously for all commodities across the different regions of a monetary area. It is therefore possible that monetary expansions or contractions will have different effects in different regions, if there are regional asymmetries in the monetary transmission mechanism. We estimate the size of such asymmetries across the nine provinces of South Africa over the period 1997-2005. There are large and statistically significant differences in the response of prices to monetary expansions and contractions.

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