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Global Food Prices and Domestic Inflation: Some Cross-Country Evidence

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  • Davide Furceri
  • Mr. Prakash Loungani
  • John Simon
  • Susan Wachter

Abstract

This paper provides a broad brush look at the impact of fluctuations in global food prices on domestic inflation in a large group of countries. For advanced economies, we find that these fluctuations have played a significant role over the period from 1960 to the present, but the impact has declined over time and become less persistent. We also find that the more recent global food price shocks occurred in the 2000s had a much bigger impact on emerging than on advanced economies. This larger impact could reflect the larger share of food in the consumption baskets in emerging economies on average than in advanced economies, and less anchored inflation expectations in emerging economies than in advanced economies.

Suggested Citation

  • Davide Furceri & Mr. Prakash Loungani & John Simon & Susan Wachter, 2015. "Global Food Prices and Domestic Inflation: Some Cross-Country Evidence," IMF Working Papers 2015/133, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:2015/133
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    Cited by:

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    2. Daniel Hyun & Jacky Lee, 2023. "Variations in Pass-Through from Global Agricultural Commodity Prices to Domestic Food Inflation," Discussion Papers 2023-24, Bank of Canada.
    3. Mr. Emre Alper & Mr. Niko A Hobdari & Ali Uppal, 2016. "Food Inflation in Sub-Saharan Africa: Causes and Policy Implications," IMF Working Papers 2016/247, International Monetary Fund.
    4. Emanuel Kohlscheen, 2022. "Understanding the food component of inflation," Papers 2212.09380, arXiv.org.
    5. Ha,Jongrim & Ivanova,Anna & Ohnsorge,Franziska Lieselotte & Unsal Portillo Ocando,Derya Filiz, 2019. "Inflation : Concepts, Evolution, and Correlates," Policy Research Working Paper Series 8738, The World Bank.
    6. Gert Peersman, 2022. "International Food Commodity Prices and Missing (Dis)Inflation in the Euro Area," The Review of Economics and Statistics, MIT Press, vol. 104(1), pages 85-100, March.
    7. John Ssozi & Simplice Asongu & Voxi Heinrich Amavilah, 2019. "The effectiveness of development aid for agriculture in Sub-Saharan Africa," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 46(2), pages 284-305, March.
    8. Ghiaie, Hamed & Auclair, Gregory & Noah Ndela Ntsama, Jean Frederic, 2019. "Macroeconomic and welfare effects of tax reforms in emerging economies: A case study of Morocco," Journal of Policy Modeling, Elsevier, vol. 41(4), pages 666-699.
    9. Choi, Sangyup & Furceri, Davide & Loungani, Prakash & Mishra, Saurabh & Poplawski-Ribeiro, Marcos, 2018. "Oil prices and inflation dynamics: Evidence from advanced and developing economies," Journal of International Money and Finance, Elsevier, vol. 82(C), pages 71-96.
    10. Mounir El-Karimi & Ahmed El-Ghini, 2020. "The Transmission of Global Commodity Prices to Consumer Prices in a Commodity Import-Dependent Country: Evidence from Morocco," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 67(1), pages 15-32, March.
    11. Jasmien De Winne & Gert Peersman, 2016. "Macroeconomic Effects of Disruptions in Global Food Commodity Markets: Evidence for the United States," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(2 (Fall)), pages 183-286.
    12. Abbas, Syed Kanwar & Lan, Hao, 2020. "Commodity price pass-through and inflation regimes," Energy Economics, Elsevier, vol. 92(C).
    13. Sara Boni & Massimiliano Caporin & Francesco Ravazzolo, 2024. "Nowcasting Inflation at Quantiles: Causality from Commodities," BEMPS - Bozen Economics & Management Paper Series BEMPS102, Faculty of Economics and Management at the Free University of Bozen.
    14. Carrière-Swallow, Yan & Deb, Pragyan & Furceri, Davide & Jiménez, Daniel & Ostry, Jonathan D., 2023. "Shipping costs and inflation," Journal of International Money and Finance, Elsevier, vol. 130(C).
    15. Aloui, Riadh & Ben Jabeur, Sami & Rezgui, Hichem & Ben Arfi, Wissal, 2023. "Geopolitical risk and commodity future returns: Fresh insights from dynamic copula conditional value-at-risk approach," Resources Policy, Elsevier, vol. 85(PB).
    16. Thibault Lemaire & Paul Vertier, 2023. "International Commodity Prices Transmission to Consumer Prices in Africa," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03944888, HAL.
    17. Кожамкулов Канат // Kozhamkulov Kanat & Дәулетханұлы Елдос // Dauletkhanuly Yeldos & Агамбаева Саида // Agambayeva Saida, 2023. "Влияние мировых и внешнеторговых цен на продовольственные товары на внутреннюю инфляцию Казахстана. // The impact of world and foreign trade prices for food products on domestic inflation in Kazakhsta," Working Papers #2023-8, National Bank of Kazakhstan.
    18. Marcos J. G. Rambalducci & Barbara R. Feltrin, 2018. "The Impact Of The Monetary Value Of The Basket Of Goods In The Economy Of Londrina/Pr – Brazil," Economy & Business Journal, International Scientific Publications, Bulgaria, vol. 12(1), pages 37-51.
    19. Jasmien De Winne & Gert Peersman, 2016. "Macroeconomic Effects of Disruptions in Global Food Commodity Markets: Evidence for the United States," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 47(2 (Fall)), pages 183-286.
    20. Abdullah, Muhammad & Gul, Zarro & Waseem, Faiza & Islam, Tanweer, 2021. "The State of Pakistan’s Economy and the Ineffectiveness of Monetary Policy," MPRA Paper 112678, University Library of Munich, Germany.
    21. Mourad Zmami & Ousama Ben-Salha, 2023. "What factors contribute to the volatility of food prices? New global evidence," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 69(5), pages 171-184.
    22. Michael Bleaney & Manuela Francisco, 2018. "Is The Phillips Curve Different In Poor Countries?," Bulletin of Economic Research, Wiley Blackwell, vol. 70(1), pages 17-28, January.
    23. Muhammad Ali Rizwan & Muhammad Zeeshan Younas & Hafiza Sadaf Zahra & Zartaj Jamil, 2020. "External Monetary Constraints Imposed by Developed Economies on Developing Economies: Empirical Evidence from Pakistan," Asian Development Policy Review, Asian Economic and Social Society, vol. 8(1), pages 7-29, March.
    24. Xiangjun Wu & Juan Xu, 2021. "Drivers of food price in China: A heterogeneous panel SVAR approach," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 67-79, January.

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