IDEAS home Printed from https://ideas.repec.org/a/taf/jdevst/v57y2021i11p1852-1870.html
   My bibliography  Save this article

Effects of Monetary Policy on Food Inequality in India

Author

Listed:
  • Kuhelika De
  • Venoo Kakar

Abstract

Food insecurity and hunger are significant components of standard poverty measures and continue to be pressing issues in emerging market economies. However, these issues have received less attention in examining the indirect effects of monetary policy. In this paper, we study the impact of monetary policy on food inequality in India. Specifically, we examine the impact of monetary policy shocks on relative food prices and the distribution of food consumption, focusing on subsistence food consumption of poor households. Using the most recent household survey data, we estimate the dynamic effects of monetary policy shocks on relative food prices and the distribution of food consumption in rural and urban India using a dynamic common factor model. Our results show that expansionary monetary policy shocks increase the relative price of food, reduce the food consumption of poor households, and raise food consumption inequality across households. Increase in the relative price of food following a monetary expansion disproportionately hurts the poor relative to the non-poor. This is the first study to provide evidence of a ‘food price channel’ in monetary policy transmission to understand food inequality. This study holds important policy implications for Indian central bankers and policymakers as well as for those in similar emerging market economies.

Suggested Citation

  • Kuhelika De & Venoo Kakar, 2021. "Effects of Monetary Policy on Food Inequality in India," Journal of Development Studies, Taylor & Francis Journals, vol. 57(11), pages 1852-1870, November.
    • Handle: RePEc:taf:jdevst:v:57:y:2021:i:11:p:1852-1870
    DOI: 10.1080/00220388.2021.1906861
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00220388.2021.1906861
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00220388.2021.1906861?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peydró, José-Luis & Jasova, Martina & Mendicino, Caterina & Panetti, Ettore & Supera, Dominik, 2021. "Monetary Policy, Labor Income Redistribution and the Credit Channel: Evidence from Matched Employer-Employee and Credit Registe," CEPR Discussion Papers 16549, C.E.P.R. Discussion Papers.
    2. Nittai K. Bergman & David Matsa & Michael Weber & Michael Weber, 2022. "Inclusive Monetary Policy: How Tight Labor Markets Facilitate Broad-Based Employment Growth," CESifo Working Paper Series 9512, CESifo.
    3. Mäki-Fränti, Petri & Silvo, Aino & Gulan, Adam & Kilponen, Juha, 2022. "Monetary policy and inequality in a small open economy," Research Discussion Papers 3/2022, Bank of Finland.
    4. repec:zbw:bofrdp:2022_003 is not listed on IDEAS
    5. Mäki-Fränti, Petri & Silvo, Aino & Gulan, Adam & Kilponen, Juha, 2022. "Monetary policy and inequality: The Finnish case," Bank of Finland Research Discussion Papers 3/2022, Bank of Finland.
    6. Anastasia Burya & Rui Mano & Mr. Yannick Timmer & Miss Anke Weber, 2022. "Monetary Policy Under Labor Market Power," IMF Working Papers 2022/128, International Monetary Fund.
    7. Matusche, Alexander & Wacks, Johannes, 2023. "Does wealth inequality affect the transmission of monetary policy?," Journal of Macroeconomics, Elsevier, vol. 75(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jdevst:v:57:y:2021:i:11:p:1852-1870. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/FJDS20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.