Exchange Rate Pass-Through to Consumer Prices in South Africa: Evidence from Micro-Data |
| |
| Authors: | Janine Aron Kenneth Creamer John Muellbauer Neil Rankin |
| |
| Institution: | 1. Institute for New Economic Thinking at the Oxford Martin School, University of Oxford, Oxford, UKjanine.aron@economics.ox.ac.uk;3. School of Economic and Business Sciences, University of the Witwatersrand, Johannesburg, South Africa;4. Nuffield College, University of Oxford, Oxford, UK;5. Institute for New Economic Thinking at the Oxford Martin School, University of Oxford, Oxford, UK;6. Department of Economics, Stellenbosch University, Stellenbosch, South Africa |
| |
| Abstract: | AbstractA sizeable literature examines exchange rate pass-through to disaggregated import prices, but few micro-studies focus on consumer prices. This article explores exchange rate pass-through to consumer prices in South Africa, for 2002–2007, using a unique data set of highly disaggregated data at the product and outlet level. The empirical approach allows pass-through to be calculated over various horizons for different goods and services. The heterogeneity of pass-through for food sub-components is considerable. Switches between import and export parity pricing of maize are found significant for five out of ten food sub-components. Using actual weights from the CPI basket, overall pass-through to the almost 63 per cent of the CPI covered is about 30 per cent after two years, and higher for food. |
| |
| Keywords: | |
|
|
