Sacrifice Ratios for Euro Area Countries: New Evidence on the Costs of Price Stability

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors' own opinions and do not necessarily refl ect those of the editors. Terms of use: Documents in Ruhr Economic Papers #520

Structural estimates of the South African sacrifice ratio

“…Applying two models of SR estimation, namely Cecchetti and Rich's (2001) SVAR specification and Ball's method, Belke and Böing (2014) estimated the SR for the eurozone countries. From their empirical findings, most countries were found to have an SR of between -1 and 2 per cent of real GDP for a given 1 per cent point reduction in inflation.…”

“…This study employs quarterly data over the sample period of 1998Q1 to 2019 Q3 (from the time when the bank rate was replaced by a repo rate). To keep the analysis as parsimonious as possible, as in Belke and Böing (2014) and Durand et al (2008), two variables are generally included to estimate the SR, namely real GDP and the CPI. Both our variables are transformed into their growth forms through differencing.…”