Asymmetries in the effects of monetary policy: the case of South Africa
Fielding, David; Shields, Kalvinder
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.
Publisher: University of Otago
Series number: 509
Keywords: monetary union; South Africa; transmission mechanism; Inflation
Research Type: Discussion Paper