Energy and food price rises have ‘strong’ second-round effects in South Africa, paper says
Model allows quantification of second-round impact of food and energy price rises, researchers say
Price shocks to food and energy have "strong" and quantifiable second-round effects on inflation, a working paper published by the South African Reserve Bank argues.
In Second-round effects from food and energy prices: an SBVAR approach, Franz Ruch and Stan du Plessis note most discussion of the second-round effects of key "non-core inflation" goods on the South African economy "remains anecdotal".
The authors build a structural Bayesian vector autoregression (SBVAR) model to analyse the effects
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