Inequality, Output-Inflation Trade-Off and Economic Policy Uncertainty

Evidence From South Africa

  • Eliphas Ndou
  • Thabo Mokoena

Table of contents

  1. Front Matter
    Pages i-xxxvii
  2. Eliphas Ndou, Thabo Mokoena
    Pages 1-31
  3. Income Inequality, GDP Growth and Inflation Regimes

  4. Inequality and Monetary Policy

  5. The Role of the Monetary Policy Channel in Transmitting Shocks to Income Inequality

  6. Consumption Inequality and Income Inequality

  7. Macroprudential Policy and Income Inequality

  8. Bank Concentration, Income Inequality and Other Channels

  9. Output-Inflation Trade-Off and the Role of Inflation Regimes

  10. Output Growth Persistence and Inflation

  11. Economic Policy Uncertainty, Expansionary Monetary Policy and Fiscal Policy Multipliers

  12. Economic Policy Uncertainty and the Lending Rates, Credit and Corporate Cash Holding Channels

  13. Back Matter
    Pages 493-507

About this book


This book focuses on income inequality, output-inflation trade-off and economic policy uncertainty in South Africa. Tight monetary and macroprudential policies raise income inequality. Income inequality transmits monetary policy and macroprudential policy shocks to real economic activity. Economic policy uncertainty influences the dynamics in the lending rate margins, inflation expectations, credit, pass-through of the repo rate to bank lending rates and companies’ cash holdings. The trade-off between output and inflation and output growth persistence vary with inflation regimes. Stimulatory demand policy shocks are less effective in high inflation regime. High income inequality raises consumption inequality, which raises demand for credit, but price stability matters in this link. Increased bank concentration raises income inequality, lowers economic growth and employment rate. Elevated economic policy uncertainty lowers output growth, lowers capital formation, reduces credit and raises companies’ cash holdings. Increased companies’ cash holdings reduce capital formation and impact the transmission of expansionary monetary policy shocks to real economic activity. This book shows there is an inflation level within the target band below it which lowers income inequality, while raising GDP growth and employment. Thus price stability, economic policy uncertainty and income inequality matter for the efficient transmission of policy shocks.


Output-inflation trade off Companies` cash holding Inflation regimes Economic policy uncertainty Policy ineffectiveness Policy multipliers Counterfactual analysis New Keynesian economics Multiplier effects of expansionary monetary policy Output growth Income inequality GDP Growth Monetary policy shocks Financial globalisation Manufacturing employment shocks Credit Dynamics in South Africa Inequality in South Africa Bank concentration shocks impact Expansionary monetary policy

Authors and affiliations

  • Eliphas Ndou
    • 1
  • Thabo Mokoena
    • 2
  1. 1.Economic Research DepartmentSouth African Reserve BankPretoriaSouth Africa
  2. 2.Department of Economic, Small Business Development, Tourism and Environmental AffairsFree State Provincial GovernmentBloemfonteinSouth Africa

Bibliographic information