Monetary Policy and Inflation Rates by Expenditure Deciles and Rural Areas

  • Eliphas Ndou
  • Nombulelo Gumata
  • Mthokozisi Mncedisi Tshuma


Evidence shows that loose and tight monetary policy shocks exerts different effects on the inflation by expenditure deciles and rural areas. At peak response expenditure deciles two, six and the rural areas’ inflation rates are more responsive to the repo rate loosening compared to the responses of expenditure decile ten. A similar pattern of responses is evident with respect to policy tightening.


  1. Andrei, D., Herskovic, B., & Ledoit, O. (2017, November 30). The redistributive effects of monetary policy. Available at SSRN or
  2. Bunn, P., Pugh, A., & Yeates, C. (2018). The distributional impact of monetary policy easing in the UK between 2008 and 2014 (Bank of England Staff Working Paper No. 720).Google Scholar
  3. Coibion, O., Gorodnichenko, Y., Kueng, L., & Silvia, J. (2016). Innocent bystanders? Monetary policy and inequality. Journal of Monetary Economics, 88(C), 70–89.Google Scholar
  4. Furceri, D., Loungani, P., & Zdzienicka, A. (2016). The effects of monetary policy shocks on inequality (IMF Working Paper No. WP/16/245).Google Scholar
  5. Guerello, C. (2017). Conventional and unconventional monetary policy vs. household income distribution: An empirical analysis for the Euro area. Journal of International Money and Finance. Google Scholar
  6. Mumtaz, H., & Theophilopoulou, A. (2017). The impact of monetary policy on inequality in the UK: An empirical analysis. European Economic Review, 98, 410–423.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2019

Authors and Affiliations

  • Eliphas Ndou
    • 1
  • Nombulelo Gumata
    • 2
  • Mthokozisi Mncedisi Tshuma
    • 3
  1. 1.South African Reserve BankPretoriaSouth Africa
  2. 2.PretoriaSouth Africa
  3. 3.National Planning Commission SecretariatPretoriaSouth Africa

Personalised recommendations