A Sticky Information Phillips Curve for South Africa |
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| Authors: | Monique Reid Gideon du Rand |
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| Affiliation: | Department of Economics, University of Stellenbosch, Stellenbosch, Western Cape, South Africa |
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| Abstract: | Mankiw and Reis propose the Sticky Information Phillips Curve (SIPC) as an alternative to the standard New Keynesian Phillips Curve to address empirical shortcomings in the latter. A SIPC for South Africa is estimated, and we find estimates of information updating probability between 0.69 and 0.81, somewhat higher than suggested by methods using micro‐evidence. Because the estimation requires data on expectations of current period inflation and output gap conditional on sequences of earlier period information sets, we provide a detailed analysis of the impact on our estimates of alternative proxies available in South Africa. |
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| Keywords: | E31 E3 E52 South Africa sticky information Phillips curve |
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