Inaccurate inflation data in South Africa fuels public distrust in monetary policy.
The article examines if actual price changes in South Africa from 1974 to 2006 support low inflation credibility. By comparing price movements with inflation rates, the study finds no consistent over- or underreporting of price changes. This suggests that doubts about inflation accuracy may lead people to doubt the benefits of inflation-targeting policies, even though there is little evidence to support these doubts.