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E52

Monetary Policy

Publication

The transmission of monetary policy via the banks’ balance sheet - does bank size matter?

Tumisang Loate and Nicola Viegi
We study the credit channel of monetary policy in South Africa between 2002 and 2019 using banks’ balance sheets. We show that there is a significant heterogeneity within the banking sector in both the loan and deposit sides of the banks’ balance sheets. In response to a contractionary monetary...
Jan 2021
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Publication

'Quantitative Easing' and central bank asset purchases in South Africa: A DSGE approach

Cobus Vermeulen
This paper develops a small open-economy (SOE) dynamic stochastic general equilibrium (DSGE) model to evaluate the effect of the temporary emergency purchases of government bonds by the South African Reserve Bank (SARB) during 2020. The model is constructed in the portfolio balancing framework, in...
Nov 2020
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Publication

Does household net financial wealth explain the asymmetric reaction of household consumption to monetary policy shocks in South Africa?

Eliphas Ndou
Ndou et al (2019) showed that, in absolute terms, the decline in household consumption due to the monetary policy tightening shocks exceeds the increase in household consumption, following the monetary policy loosening shocks of the same magnitude. This paper applies a counterfactual vector...
Sep 2020
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Publication

Spillovers of the Conventional and Unconventional Monetary Policy from the US to South Africa

Alain Kabundi, Tumisang Loate and Nicola Viegi
This paper assesses the effect of US monetary policy on South Africa during the period 1990- 2018. We separately analyse and compare the effect of conventional monetary policy, before the Global Financial Crisis, and unconventional monetary policy, after the US monetary policy reached the zero-...
Apr 2020
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Publication

The optimal monetary and macroprudential policies for the South African economy

Guangling Liu and Thabang Molisey
We investigate the optimal design and e ectiveness of monetary and macroprudential policies in promoting macroeconomic (price) and financial stability for the South African economy. We develop a New Keynesian dynamic stochastic general equilibrium model featuring a housing market, a banking sector...
Feb 2020
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Publication

The monetary policy of the South African Reserve Bank: stance, communication and credibility

Alberto Coco, Nicola Viegi
This paper analyses the evolution of the monetary policy stance, communication and credibility of the South African Reserve Bank (SARB) since 2000, when it adopted a flexible Inflation Targeting (IT) regime to facilitate the achievement of its price stability mandate. Empirical results indicate...
Jul 2019
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Publication

Fiscal stimulus in a global zero lower bound environment

Fernando Garcia-Barragan and Guangling Liu
This paper investigates the effect of fiscal stimulus from an emerging market economy perspective. The model captures the signicant decline in China's net exports and remarkable quantity of resources that the Chinese government invested into the economy through state-owned enterprises in the...
Aug 2018
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Publication

Credit frictions and co-movement of durable and non-durable goods in a small open economy

Hilary Patroba
In this paper I investigate, numerically, the co-movement puzzle by testing the ability of borrowing and lending constraints to counter the opposite movement of durable and non-durable goods in response to foreign monetary policy and international bond shocks. I do this by simulating a small open...
Feb 2018
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