Modelling inflation in South Africa: A multivariate cointegration analysis

J. W. Fedderke, E. Schaling

Research output: Contribution to journalArticlepeer-review

27 Scopus citations


We employ an expectations augmented Phillips curve framework to investigate the link between inflation, unit labour costs, the output gap, the real exchange rate and inflation expectations. Using multivariate cointegration techniques, we find evidence consistent with mark-up behaviour of output prices over unit labour costs. Most importantly, we find that the mark-up in the South African economy is much higher than in the U.S. For South Africa we find a markup of about 30 per cent: three times as high as the 10 per cent markup found for the U.S.

Original languageEnglish (US)
Pages (from-to)79-92
Number of pages14
JournalSouth African Journal of Economics
Issue number1
StatePublished - Mar 2005

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics


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