World Food Prices And Monetary Policy
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World Food Prices And Monetary Policy
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Author : Roberto Chang
language : en
Publisher: International Monetary Fund
Release Date : 2010-07-01
World Food Prices And Monetary Policy written by Roberto Chang and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010-07-01 with Business & Economics categories.
The large swings in world food prices in recent years renew interest in the question of how monetary policy in small open economies should react to such imported price shocks. We examine this issue in a canonical open economy setting with sticky prices and where food plays a distinctive role in utility. We show how world food price shocks affect natural output and other aggregates, and derive a second order approximation to welfare. Numerical calibrations show broad CPI targeting to be welfare-superior to alternative policy rules once the variance of food price shocks is sufficiently large as in real world data.
World Food Prices The Terms Of Trade Real Exchange Rate Nexus And Monetary Policy
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Author : Mr.Luis Catão
language : en
Publisher: International Monetary Fund
Release Date : 2013-05-17
World Food Prices The Terms Of Trade Real Exchange Rate Nexus And Monetary Policy written by Mr.Luis Catão and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-05-17 with Business & Economics categories.
How should monetary policy respond to large fluctuations in world food prices? We study this question in an open economy model in which imported food has a larger weight in domestic consumption than abroad and international risk sharing can be imperfect. A key novelty is that the real exchange rate and the terms of trade can move in opposite directions in response to world food price shocks. This exacerbates the policy trade-off between stabilizing output prices vis a vis the real exchange rate, to an extent that depends on risk sharing and the price elasticity of exports. Under perfect risk sharing, targeting the headline CPI welfare-dominates targeting the PPI if the variance of food price shocks is not too small and the export price elasticity is realistically high. In such a case, however, targeting forecast CPI is a superior choice. With incomplete risk sharing, PPI targeting is clearly a winner.
Monetary Policy And Food Inflation In Emerging And Developing Economies
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Author : Abdul-Aziz Iddrisu
language : en
Publisher: Routledge
Release Date : 2021-11-23
Monetary Policy And Food Inflation In Emerging And Developing Economies written by Abdul-Aziz Iddrisu and has been published by Routledge this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-11-23 with Business & Economics categories.
This book focuses on the impact of monetary policy and food price volatility and inflation in emerging and developing economies. The tendency for food price volatility to blot inflation forecasting accuracy, engender tail dynamics in the overall inflation trajectory and derail economic welfare is well known in the literature. The ability of monetary policy to exact stability in food prices, theoretically, has also been well espoused. The empirical evidence, however, is not only in short supply, but also the studies available have dwelt on approaches that underplay the volatile behaviour of food prices. This book focuses on inflation targeting in emerging economies such as Chile, Mexico, Turkey, Brazil, Hungary, Russia, Colombia, South Africa, Indonesia and Ghana, as these are economies with considerable proportion of the consumption basket occupied by food. The book provides the means to understand at first hand the correct way to model food inflation, account for the related policy responses to deviations either in the short or medium to long term, and in market conditions that are subject to excessive variability. Strong evidence is presented that captures deviations of food prices from their trend and the accompanying monetary policy effect in stabilizing such variabilities across distinct frequencies. The novel approach in this book addresses the burgeoning puzzles of asymmetry in monetary policy effect on food prices at high, medium and low episodes of food inflation. In doing so, this book presents a powerful tool for researchers interested in understanding not just the transmission mechanism, but also the magnitudes involved, and to policymakers whose existing tools have failed them. Future studies will do well to deepen the evidence and seek new grounds to which the phenomenon manifests beyond and below emerging markets. This book will be of great interest to students, scholars and policymakers involved in agricultural economics, financial economics, food security and sustainable development.
Global Food Prices And Domestic Inflation
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Author : Davide Furceri
language : en
Publisher: International Monetary Fund
Release Date : 2015-06-24
Global Food Prices And Domestic Inflation written by Davide Furceri and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015-06-24 with Business & Economics categories.
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.
The Source Of Food Price Swings And Their Effect On Developing Economies
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Author : Thilo Trost
language : en
Publisher: GRIN Verlag
Release Date : 2012-03-13
The Source Of Food Price Swings And Their Effect On Developing Economies written by Thilo Trost and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-03-13 with Business & Economics categories.
Scientific Essay from the year 2012 in the subject Economics - Monetary theory and policy, grade: 1,3, Zeppelin University Friedrichshafen, language: English, abstract: In the following short paper, I am going to evaluate the economic effects of food price swings on emerging and developing economies. In recent years, we witnessed enormous increases and volatilities in commodity and especially food prices. Concerns of starvation are therefore strengthening. These economies tend to have a high percentage of food in their standardized consumption basket, which means they spend more of their income on food in general. Since food is an essential good of living, the recent price developments over the past ten years are threatening the social stability of these economies as well as the well-being of their inhabitants. In contrast to developed economies, the population of these relatively “poor” economies is facing enormous problems feeding themselves and their children. This paper antends to give an answer to the extend of the pass-through effects of price increases to developing economies and the driving effects of those prices. In the first part of the paper I am going to give a short overview over recent price developments, then discuss the topic of influential factors on these prices, especially the extend which speculation has on aforementioned price in- and decreases. In the second part, I am going to eruate the pass-through effects of world food prices to developing economies as shown in the autumn study of the international monetary fund (hereinafter mentioned as IMF), namely what effect a 5% increase of food prices on international trade markets has on these economies, especially their output gap, and the foreign exchange value of the currency. The question to evaluate will not only be how price developments are created but also how they influence the economies and social stability of developing countries.
Implications Of Food Subsistence For Monetary Policy And Inflation
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Author : Rafael Portillo
language : en
Publisher: International Monetary Fund
Release Date : 2016-03-17
Implications Of Food Subsistence For Monetary Policy And Inflation written by Rafael Portillo and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2016-03-17 with Business & Economics categories.
We introduce subsistence requirements in food consumption into a simple new-Keynesian model with flexible food and sticky non-food prices. We study how the endogenous structural transformation that results from subsistence affects the dynamics of the economy, the design of monetary policy, and the properties of inflation at different levels of development. A calibrated version of the model encompasses both rich and poor countries and broadly replicates the properties of inflation across the development spectrum, including the dominant role played by changes in the relative price of food in poor countries. We derive a welfare-based loss function for the monetary authority and show that optimal policy calls for complete (in some cases nearcomplete) stabilization of sticky-price non-food inflation, despite the presence of a foodsubsistence threshold. Subsistence amplifies the welfare losses of policy mistakes, however, raising the stakes for monetary policy at earlier stages of development.
Food Inflation In Sub Saharan Africa
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Author : Mr.Emre Alper
language : en
Publisher: International Monetary Fund
Release Date : 2017-01-18
Food Inflation In Sub Saharan Africa written by Mr.Emre Alper and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-01-18 with Business & Economics categories.
This paper analyzes food inflation trends in Sub-Saharan Africa (SSA) from 2000 to 2016 using two novel datasets of disaggregated CPI baskets. Average food inflation is higher, more volatile, and similarly persistent as non-food non-fuel (NF/NF) inflation, especially in low-income countries (LICs) in SSA. We find evidence that food inflation became less persistent from 2009 onwards, related to recent improvements in monetary policy frameworks. We also find that high food prices are driven mainly by non-tradable food in SSA and there is incomplete pass-through from world food and fuel prices and exchange rates to domestic food prices. Taken together, these finding suggest that central banks in low-income countries with high and persistent food inflation should continue to pay attention to headline inflation to anchor inflation expectations. Other policy levers include reducing tariffs and improving storage and transport infrastructure to reduce food pressures.
Global Monitoring Report 2012
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Author : World Bank
language : en
Publisher: World Bank Publications
Release Date : 2012-04-24
Global Monitoring Report 2012 written by World Bank and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-04-24 with Medical categories.
This year's report summarizes the short- and long-term impact of food prices on several MDGs, explores future trends, and review policy responses, from domestic policies such as social safety nets, nutritional programs and agricultural policies, to regional trade policies to support by the international community.
Recent Inflationary Trends In World Commodities Markets
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Author : Noureddine Krichene
language : en
Publisher: INTERNATIONAL MONETARY FUND
Release Date : 2008-05-01
Recent Inflationary Trends In World Commodities Markets written by Noureddine Krichene and has been published by INTERNATIONAL MONETARY FUND this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008-05-01 with categories.
Expansionary monetary policies in key industrial countries and sharply depreciating U.S. dollar exchange rate sent commodities prices soaring at unprecedented rates during 2003-2007. Food prices rose to alarming levels threatening malnutrition and food riots. In contrast, consumer price indices, a leading indicator for monetary policy, were showing almost no inflation and posed a price puzzle insofar their evolution was not responsive to record low interest rates, double digit commodities inflation, and sharp exchange rate depreciation. Commodities prices were shown to be driven by one common trend, identified as a monetary shock. Policy makers may have to face a policy dilemma: maintain monetary policy stance with accelerating commodities price inflation, subsequent world recession, and financial disorder; or tighten monetary policy with subsequent world recession followed by recovery and financial and price stability.
Global Food Price Inflation And Policy Responses In Central Asia
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Author : International Monetary Fund
language : en
Publisher: International Monetary Fund
Release Date : 2012-03-01
Global Food Price Inflation And Policy Responses In Central Asia written by International Monetary Fund and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-03-01 with Business & Economics categories.
This paper examines the implications of elevated global food prices for inflation in select Central Asian economies - Kazakhstan, the Kyrgyz Republic, Tajikistan, and Uzbekistan. The findings suggest that global food inflation has significant short-run effects that build over time. Inflation outcomes simulated under alternative global wheat price assumptions underscore these vulnerabilities, and suggest that sustained administrative measures are unlikely to prove effective. In line with structural economic features, the interest rate channel of monetary policy is found to be limited, arguing for a broad policy strategy to control more expansive inflationary pressures. Looking ahead, measures to enhance supply responses, deepen domestic financial markets, develop adequate social safety nets, and increase central bank independence are warranted.