The Transmission of Oil and Food Prices to Consumer Prices: Evidence for the MENA Countries
AbstractThis paper investigates the effects of global oil and food price shocks to consumer prices in Middle East-North African (MENA) countries using threshold cointegration methods. Oil and food price shocks increase domestic prices in the long run, whereby the impact of food prices dominates. While global prices are weakly exogenous, consumer prices respond to deviations from the equilibrium relationship. The short run adjustment pattern exhibits asymmetries and is particularly strong after positive shocks. Downward rigidities on wages may play a crucial role in this regard, as the relatively weak reactions of consumer prices after negative shocks are related to labour market institutions and public subsidies. The more rigid the regulations the more pronounced are the asymmetries. Robustness checks show that international price shocks do not affect GDP growth.
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Bibliographic InfoPaper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1332.
Length: 25 p.
Date of creation: 2013
Date of revision:
Oil and food price transmission; asymmetric error correction; MENA region;
Other versions of this item:
- Ansgar Belke & Christian Dreger, 2013. "The Transmission of Oil and Food Prices to Consumer Prices – Evidence for the MENA Countries," Ruhr Economic Papers 0448, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
This paper has been announced in the following NEP Reports:
- NEP-AFR-2013-11-09 (Africa)
- NEP-AGR-2013-11-09 (Agricultural Economics)
- NEP-ALL-2013-11-09 (All new papers)
- NEP-ARA-2013-11-09 (MENA - Middle East & North Africa)
- NEP-ENE-2013-11-09 (Energy Economics)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- The transmission of oil and food prices to consumer prices. Evidence for the MENA countries
by pmakdissi in NEP-ARA blog on 2014-05-09 12:05:08
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