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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Inflation versus unemployment in South Africa: is there a trade-off?
Author:Hodge, D.ISNI
Periodical:South African Journal of Economics
Geographic term:South Africa
External link:https://onlinelibrary.wiley.com/doi/10.1111/j.1813-6982.2002.tb01298.x/pdf
Abstract:In this essay the author uses the designation trade-off to cover the hypothesis about inflation and unemployment proposed by Keynesian and post-Keynesian schools. Choosing the Phillips curve as his methodological tool in this econometric study, he sets out to see if an increasingly tight money policy over the past thirty years in South Africa has had the expected pendant of rising unemployment and to see how stable this relationship has been. His findings are not consistent with the trade-off hypothesis, as increasingly stringent financial control has not seen concomitant changes in employment or changes in the formal sector of employment. The article is divided into three parts: theoretical background; a review of earlier studies; empirical evidence of the relationship between inflation, unemployment, and growth in South Africa. Most changes have occurred independently of each other, although there has been a positive relationship between inflation and growth. The lack of effect on unemployment may be because unemployment in South Africa is structural, not the result of deficient aggregate demand. Bibliogr. [ASC Leiden abstract]