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Process Of Global Shocks Transmission To Domestic Food Price Level: Case Of Bangladesh

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  • Huda, Fakir Azmal

Abstract

The world experienced in dramatic price surge of food commodities since mid of 2007 to 2008. It was claimed that the crisis were being mainly for backdrop of global shocks in food and energy price. But how the shocks come to domestic market from external sources is a researchable phenomenon. Surprisingly few attempts have been made to systematically analysis of shock transmission from international to domestic market. The study analyzed the effect of global commodity market factors and domestic exchange rate development on domestic food price in Bangladesh. A bi-variants co-integration approach was applied for the analysis of shock transmission. Finally an error correction model was developed. The overall magnitudes of the pass through suggest that only 46 per cent of the total world shock pass-through in domestic economy.

Suggested Citation

  • Huda, Fakir Azmal, 2. "Process Of Global Shocks Transmission To Domestic Food Price Level: Case Of Bangladesh," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 2(2).
  • Handle: RePEc:ags:ijfaec:168584
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    References listed on IDEAS

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    1. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 39(3), pages 106-135.
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    3. Peter J Montiel & Bijan B. Aghevli & Mohsin S. Khan, 1991. "Exchange Rate Policy in Developing Countries; Some Analytical Issues," IMF Occasional Papers 78, International Monetary Fund.
    4. Christopher L. Gilbert, 2008. "How to Understand High Food Prices," Department of Economics Working Papers 0823, Department of Economics, University of Trento, Italia.
    5. John Baffes & Bruce Gardner, 2003. "The transmission of world commodity prices to domestic markets under policy reforms in developing countries," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 6(3), pages 159-180.
    6. Katsushi Imai & Raghav Gaiha & Ganesh Thapa, 2008. "Transmission of World Commodity Prices to Domestic Commodity Prices in India and China," Brooks World Poverty Institute Working Paper Series 4508, BWPI, The University of Manchester.
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