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The Role Of Commodity Prices In Macroeconomic Policy In South Africa

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  • Matthew Kofi Ocran
  • Nicholas Biekpe

Abstract

This paper examines whether commodity prices can be used as signal for informing macroeconomic policy in South Africa using the new approach for testing Granger causality developed by Toda and Yamamoto (1995). Evidence of causality from average gold price to interest rate, money, exchange rate and the consumer price index was observed. Again, evidence of causality was observed from metals price index to interest rate, money and exchange rate. The results suggest there is merit in using South Africa's average gold price and the metals price index of the International Monetary Fund as informational variables in setting monetary policy.

Suggested Citation

  • Matthew Kofi Ocran & Nicholas Biekpe, 2007. "The Role Of Commodity Prices In Macroeconomic Policy In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 75(2), pages 213-220, June.
    • Handle: RePEc:bla:sajeco:v:75:y:2007:i:2:p:213-220
    DOI: 10.1111/j.1813-6982.2007.00120.x
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    References listed on IDEAS

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    Cited by:

    1. Hegerty, Scott W., 2016. "Commodity-price volatility and macroeconomic spillovers: Evidence from nine emerging markets," The North American Journal of Economics and Finance, Elsevier, vol. 35(C), pages 23-37.

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