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Determinants of Consumer Price Inflation versus Producer Price Inflation in Asia

Author

Listed:
  • Jongwanich, Juthathip

    (Thammasat University)

  • Wongcharoen, Petchtharin

    (Thammasat University)

  • Park, Donghyun

    (Asian Development Bank)

Abstract

We empirically examine and compare the determinants of producer and consumer price inflation in 10 Asian economies during 2000–2015. In this connection, we also investigate the pass-through of global oil prices, global food prices, and exchange rates to domestic producer and consumer prices. Overall, we find that cost-push factors such as oil and food prices are more important in explaining producer price inflation than consumer price inflation in the 10 Asian economies. On the other hand, for consumer prices, demand-pull factors still explain much of the inflation. Finally, we find that the pass-through of global oil prices, global food prices, and exchange rates tend to be higher for producer prices than consumer prices in Asia.

Suggested Citation

  • Jongwanich, Juthathip & Wongcharoen, Petchtharin & Park, Donghyun, 2016. "Determinants of Consumer Price Inflation versus Producer Price Inflation in Asia," ADB Economics Working Paper Series 491, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0491
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    References listed on IDEAS

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    2. N. Gregory Mankiw & Ricardo Reis & Justin Wolfers, 2004. "Disagreement about Inflation Expectations," NBER Chapters, in: NBER Macroeconomics Annual 2003, Volume 18, pages 209-270, National Bureau of Economic Research, Inc.
    3. Jonathan McCarthy, 2007. "Pass-Through of Exchange Rates and Import Prices to Domestic Inflation in Some Industrialized Economies," Eastern Economic Journal, Eastern Economic Association, vol. 33(4), pages 511-537, Fall.
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    More about this item

    Keywords

    Asia; commodity price shocks; consumer price; exchange rate; inflation; monetary policy; pass-through; producer price;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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