Is a real business cycle model extended with non-stationary technology shocks able to describe small open economies or are credit market imperfections necessary in addition? This study addresses this question by providing evidence of the relative ability of a model with and without financial...

This paper uses a Dynamic Stochastic General Equilibrium (DSGE) model to estimate the South African Reserve Bank's (SARB) policy reaction rule. We find that the SARB has a stable rule very much in line with those estimated for Canada, UK, Australia and New Zealand. Relative to other emerging...