Skip Navigation


Cambridge Journal of Economics Advance Access originally published online on June 6, 2005
Cambridge Journal of Economics 2006 30(2):163-180; doi:10.1093/cje/bei051
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
30/2/163    most recent
bei051v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrow Search for citing articles in:
ISI Web of Science (1)
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Hodge, D.
Right arrow Search for Related Content
Related Collections
Right arrow E31 - Price Level; Inflation; Deflation
Right arrow E32 - Business Fluctuations; Cycles
Right arrow E61 - Policy Objectives; Policy Designs and Consistency; Policy Coordination
Right arrow O40 - General
Right arrow O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
Right arrow O55 - Africa
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© The Author 2005. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.

Article

Inflation and growth in South Africa

D. Hodge*

* University of South Africa

Address for correspondence: email hodged{at}unisa.ac.za

Abstract

This paper studies the relationship between inflation and growth in South Africa. Two main issues are addressed: do tests of the South African data support the findings of cross-section studies that inflation has a negative effect on growth over the longer term? and, can higher growth be gained at the cost of higher inflation in the short run? The findings are that inflation drags down growth in South Africa over the longer term, and that, in the short run, growth above its trend requires accelerating inflation. Thus, for growth to be pulled substantially above its present low trend, inflation targeting in South Africa would have to be abandoned. However, this would be counterproductive over the longer term, once the negative relationship between inflation and growth manifests itself.

Key Words: Inflation • Growth • South Africa • Long run versus short run • Trade-off

JEL classifications: E31, E32, E61, O40, O55

Manuscript received March 1, 2004; final version received August 23, 2004.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?




Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.