Structural estimates of the South African sacrifice ratio

Hayelom Yrgaw Gereziher and Naser Yenus Nuru

No wp-2021-12, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper estimates the output cost of fighting inflation—the sacrifice ratio—for the South African economy using quarterly data spanning the period 1998Q1-2019Q3. To compute the sacrifice ratio, the structural vector autoregressive model developed by Cecchetti and Rich (2001) based on Cecchetti (1994) is employed. Our findings show us a small sacrifice ratio, which lies within the range 0.00002-0.231 per cent with an average of 0.031 per cent, indicating a low level of output to be sacrificed while fighting inflation.

Keywords: Monetary policy; Inflation targeting; Output; Sacrifice ratio; South Africa; Structural VAR (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-cba and nep-mac
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Citations: View citations in EconPapers (2)

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