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Propagation of Shocks to Food and Energy Prices: an International Comparison

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  • Michael Pedersen

Abstract

The present paper analyzes propagation of shocks to food and energy prices in 46 countries with data from the period 1999-2010. The empirical evidence suggests that in only one of the countries considered, a shock to the price of either energy or food shows no propagation to the prices of the goods and services included in the core inflation measure. In general, the propagation effect of food price shocks is larger than that of energy price shocks. Emerging economies are more affected by propagation than advanced ones. The results advocate that policy makers concerned with price stability should pay special attention to shocks affecting domestic food prices.

Suggested Citation

  • Michael Pedersen, 2011. "Propagation of Shocks to Food and Energy Prices: an International Comparison," Working Papers Central Bank of Chile 648, Central Bank of Chile.
  • Handle: RePEc:chb:bcchwp:648
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    References listed on IDEAS

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    Cited by:

    1. José de Gregorio, 2012. "Commodity Prices, Monetary Policy and Inflation," Working Papers wp359, University of Chile, Department of Economics.
    2. Robert G. Murphy & Adam Rohde, 2014. "Rational Bias in Inflation Expectations," Boston College Working Papers in Economics 857, Boston College Department of Economics, revised 25 Oct 2015.
    3. Michael Pedersen & Miguel Ricaurte B., 2014. "Effects of Oil-Price Shocks on The Economies Of Chile and Its Trading Partners," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 17(1), pages 38-65, April.
    4. Pierre-Richard Agénor & Luiz A. Pereira da Silva, 2013. "Inflation Targeting and Financial Stability: A Perspective from the Developing World," Working Papers Series 324, Central Bank of Brazil, Research Department.
    5. John Baffes & M. Ayhan Kose & Franziska Ohnsorge & Marc Stocker, 2015. "The Great Plunge in Oil Prices: Causes, Consequences, and Policy Responses," Koç University-TUSIAD Economic Research Forum Working Papers 1504, Koc University-TUSIAD Economic Research Forum.
    6. 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.
    7. 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.

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