Inflation, Money Demand, and Purchasing Power Parity in South Africa

This empirical study for South Africa indicates that there exists a stable money demand type of relationship among domestic prices, broad money, real income, and interest rates, as well as a long-run relationship among domestic prices, foreign prices, and the nominal exchange rate. In the short run, shocks to the nominal exchange rate affect domestic prices but have virtually no impact on real output, while shocks to broad money have a temporary impact on real output before becoming inflationary. Both types of shocks seem to trigger a monetary policy response, as the short-term interest rate adjusts quickly. Copyright 2001, International Monetary Fund

Dynamic Gains from Trade: Evidence from South Africa

This paper examines the empirical relationship between trade and total factor productivity (TFP) in South Africa. Using data on actual trade protection across different manufacturing sectors, it is shown that trade liberalization had a positive impact on TFP growth during the 1990s. In addition, time-series evidence on macro data supports a positive long-run relationship between TFP and openness. Copyright 2001, International Monetary Fund