If you are experiencing problems downloading PDF or HTML fulltext, our helpdesk recommend clearing your browser cache and trying again. If you need help in clearing your cache, please click here . Still need help? Email help@ingentaconnect.com

The opportunistic approach to monetary policy and financial market conditions

$54.78 plus tax (Refund Policy)

Buy Article:


We test the concept of the opportunistic approach to monetary policy in South Africa post-2000 inflation targeting regime. The article contributes to the current debate on central banks having additional objectives over and above inflation and output by incorporating a measure of financial conditions in the modelling framework. Our findings support the two features of the opportunistic approach. First, we find that the models that include an intermediate target that reflects the recent history of inflation rather than simple inflation target improve the fit of the models. Second, the data supports the view that the South African Reserve Bank (SARB) behaves with some degree of nonresponsiveness when inflation is within the zone of discretion but react aggressively otherwise. Recursive estimates from our preferred model reveal that overall there has been a subdued reaction to inflation, output and financial conditions amidst the increased economic uncertainty of the 2007–2009 financial crisis.

Keywords: C51; C52; C53; E52; E58; financial conditions; intermediate inflation; monetary policy; opportunistic approach

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036846.2012.669464

Affiliations: Faculty of Economics and Management Sciences, Department of Economics, University of Pretoria, Room 4-17, cnr Lynnwood & Roper Streets Pretoria 0002, South Africa

Publication date: June 1, 2013

More about this publication?
Related content

Share Content

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
Cookie Policy
ingentaconnect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more