South African Inflation Expectations: Sensitivity to Surprises
Stellenbosch Policy Brief No. 03/2010Publication date: 2010
Author(s):
How responsive is inflation expectations in South Africa are to unexpected shifts in key macro-economic variables? In theory, transparent and credibile policies pave the way for less aggressive policy adjustments to maintain price stability, since markets should believe that inflationary spikes are transitory. Since market players keep their expectations of long-term inflation at modest levels, they would not adjust their market decisions in a way that adds upward inflationary pressure.The empirical findings for South Africa, compare favourably with those of other countries and this supports the view that inflation targeting is a useful framework for the management of private sector expectations. If it is correctly applied, it improves the predictability of monetary policy, thereby facilitating the anchoring of inflation expectations.
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Upcoming Seminars
Monday 04 August 202512:00-13:00
Prof Willem Boshoff: Stellenbosch University
Topic: "Two competing approaches in South African competition policy: merger control and anti-cartel enforcement over the past 30 years"
12:00-13:00
Professor Johan Fourie: Stellenbosch University
Topic: "Economic History: TBC"
12:00-13:00
Dr Stephen Taylor: Director In Education & Research Fellow Stellenbosch
Topic: "TBC"
BER Weekly
25 Jul 2025 Budget hurdle cleared, but US tariff implementation remains a riskIt was another big week on the local political front, but with some constructive momentum. On the trade front, ahead of next week’s 1 August deadline, Trump announced another “massive” trade deal with Japan. The upcoming week is busy, with a slew of global and domestic data releases and several monetary policy decisions, including the SARB....
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