The Macroeconomic Effects of International Food Price Shocks on China

This paper examines the causal effects of shifts in international food commodity prices on euro area inflation dynamics using a structural VAR model that is identified with an external instrument (i.e. a series of global harvest shocks). The results reveal that exogenous food commodity price shocks have a strong impact on consumer prices, explaining on average 25%- 30% of inflation volatility. In addition, large autonomous swings in international food prices contributed significantly to the twin puzzle of missing disinflation and missing inflation in the era after the Great Recession. Specifically, without disruptions in global food markets, inflation in the euro area would have been 0.2%-0.8% lower in the period 2009-2012 and 0.5%-1.0% higher in 2014-2015. An analysis of the transmission mechanism shows that international food price shocks have an impact on food retail prices through the food production chain, but also trigger indirect effects via rising inflation expectations and a depreciation of the euro.

This paper examines whether domestic inflation spikes in Egypt during 2001-2011 were primarily the result of external food price shocks. To estimate the pass-through of international food price inflation to domestic price inflation, two different methodologies are used: a two-step regression model estimates the pass-through in the long run, and a vector autoregression model provides the short-run estimates. The empirical evidence confirms that pass-through is high in the short term, but not in the long run. More precisely, the results show that (i) long-run pass-through to domestic food inflation is relatively low, lying between 13 and 16 percent, while the long-term spill-over from domestic food inflation to core inflation is moderate, lying around 60 percent; (ii) in the short term, pass-through is relatively high, estimated around 29 percent after 6 months and around two-thirds after a year, but the spill-over effect to core inflation is limited; (iii) international food price shocks explain only a small portion of domestic inflation shocks in both the short and long terms; and (iv) international price inflation has asymmetric effects on domestic prices.

This paper examines whether domestic inflation spikes in Egypt during 2001-2011 were primarily the result of external food price shocks. To estimate the pass-through of international food price inflation to domestic price inflation, two different methodologies are used: a two-step regression model estimates the pass-through in the long run, and a vector autoregression model provides the short-run estimates. The empirical evidence confirms that pass-through is high in the short term, but not in the long run. More precisely, the results show that (i) long-run pass-through to domestic food inflation is relatively low, lying between 13 and 16 percent, while the long-term spill-over from domestic food inflation to core inflation is moderate, lying around 60 percent; (ii) in the short term, pass-through is relatively high, estimated around 29 percent after 6 months and around two-thirds after a year, but the spill-over effect to core inflation is limited; (iii) international food price shocks explain only a small portion of domestic inflation shocks in both the short and long terms; and (iv) international price inflation has asymmetric effects on domestic prices.

In an era of volatile global markets, stabilizing domestic food prices has become increasingly critical. This paper examines how participation in global agri‐food value chains (GVCs) influences food price transmission through a robust two‐step regression framework. First, we estimate country‐specific long‐run pass‐through (LRPT) coefficients for 173 countries over four separate episodes between 2000 and 2022, quantifying the extent to which changes in international food prices lead to changes in domestic consumer food prices. Then, we regress these estimates on distinct measures of GVC participation: intermediate (two‐sided or mixed) participation versus pure backward or forward trade (reflecting participation in later and earlier stages of production, respectively). Our findings reveal that nations with intermediate GVC participation experience a significant reduction in the transmission of price shocks, while those focused solely on backward or forward trade exhibit greater transmission of international food price shocks. These results challenge the dominant view that deeper global integration invariably increases the transmission of international food price shocks and highlight the potential of intermediate positioning as an effective policy tool for stabilizing domestic food prices. This study provides valuable insights for trade policy design and contributes to the broader discourse on food security.

This study analyses the dynamic spillover relationship between international and Turkish food prices by employing Markov Switching Regression (MSR) and Dynamic Conditional Correlation Generalized Autoregressive Conditional Heteroscedasticity (DCC‐GARCH) models to monthly data from 2003 to 2019. We also investigate the factors that cause a price difference between Turkish and international food markets by employing alternative econometric models, including Autoregressive Distributed Lag (ARDL), Fully Modified OLS (FMOLS), Dynamic OLS (DOLS) and MSR. We find structural shifts in the dynamics of the international/domestic food price relationship, and the relationship varies across the low and high volatility regimes. We also find that the exchange rate significantly affects the growing difference between Turkish and international food prices, while oil prices reduce that difference. Our results point out essential policy recommendations for developing food policies and ensuring sustainability in prices.

In this paper we challenge the conventional wisdom that the world’s poorest countries are also the most vulnerable to spikes in international food prices. We derive an inverted U-shaped relationship between food price transmission and the development level of a country from a theoretical model. This prediction is subsequently tested in two sets of regressions where economic development is approximated by per capita income and where we control for a number of other potential determinants of food price transmission. The first set of regressions is based on estimated transmission elasticities and the second on actual domestic food price changes during spikes in international food prices. In both sets of regressions we find strong evidence of the existence of an inverted U-shaped relation between food price transmission and income. Thus, food prices in middle income (rather than in low income) countries respond the strongest to changes in international food prices, implying that the poor in these countries are the most exposed to spikes in food prices. We also show that the factors explaining the variation in the estimated transmission elasticities can explain the variation in domestic food price changes during spikes in international food prices equally well.

Sources of food price volatility and child malnutrition in Niger and Malawi

This report reviews the literature on links between international food prices and political instability (including protests, riots and social unrest). The literature on food prices and protests, riots, unrest, or violent incidents consists mainly of peer-reviewed scholarly articles that utilise econometric modeling. Some early studies examined the links between international food prices and political instability and found conflicting results. Some assessments concluded that there were links between international food prices or food insecurity and the number of violent incidents, while others found that such a link was tenuous. This literature review covers some of the main arguments and findings in the recent literature on food prices and political instability or conflict. The majority of the econometric studies in this review find that there is a link between food price increases and a greater probability of protests, riots or social unrest. However, there are still a few studies that have contradictory results. So, the debate on the effect of food prices on political stability continues. Food subsidies, cash transfers, price controls, and the elimination of trade barriers are some of the policy interventions that may address rising food prices and mitigate the rise of violent collective action. However, the literature questions the effectiveness of such policies in cases where violence or protest action stems from deeper, underlying economic or political grievances.

We looked at how international food price shocks have impacted local inflation processes in Brazil, Chile, Colombia, Mexico, and Peru in the past decade. Using impulse-response analysis coming from cointegrated vars, we find that international food inflation shocks take from one to six quarters to pass through to domestic headline inflation, depending on the country. In addition, by calculating the elasticity of local prices to an international food price shock, we found that this pass-through is not complete. We also take a closer look at how this type of shock affects local food and core prices separately, and asses the possibility second round effects over core inflation stemming from the shock. We find that a transmission to headline prices does occur, and that part of the transmission is associated with rising core prices both directly and through possible second round effects, which implies a role for monetary policy when such a shock takes place. This is especially relevant given that international food prices have recently followed an upward trend after falling considerably during the Great Recession.

Rhona Robert N. Rapoport Janice Bumstead Working couples 1978 R.K.P. £2.50

As nations progress, the impact of climate change on food prices becomes increasingly substantial. While the influence of climate change on the yields of major agricultural products is widely recognized, its specific effect on food prices remains uncertain. This study delves into the impact of the North Atlantic Oscillation (NAO) index, a well-established climate indicator, on global food prices. To accomplish this, a robust bivariate Hurst exponent (robust bHe) is applied. The study employs a sliding windows approach across various time scales to produce a color map of this coefficient, presenting a time-varying version. Furthermore, variable-lag transfer entropy with a sliding windows approach is utilized to discern causal relationships between the NAO index and international food prices. The findings reveal that significant increases in the NAO index are correlated with noteworthy upswings in various international food prices over both short and long-term periods. Additionally, variable-lag transfer entropy confirms the causal role of the NAO index in influencing international food prices.

Beside the mixed evidences on transmission of international food price volatility to local markets and the desirability or otherwise of reliance on stabilisation policy to cushion the effects, very little is known about the key drivers of price spikes and volatility in sub-Saharan Africa. This paper is an attempt to bridge this gap, by focusing on the patterns, drivers, and policy responses to food price spikes and volatility across in Nigeria. The study was based on 16 years panel data on average monthly prices (2001:1 – 2016:12) of major food commodities across local markets in the 36 States of Nigeria, supplemented with monthly series of relevant domestic policy variables, and international prices, among other factors. Data analysis was mainly within the framework of fixed effects models. Findings suggest that food price upsurges in an average Nigeria market is more strongly related to spikes than volatility. International factors such as crude oil price, international food prices, and global beginning stock to use of coarse grains, and domestic policy variables such as real exchange rates, monetary policy rates and narrow money are strong influencers of spikes in the price of one or more food commodities in Nigeria’s local markets. Higher petrol price and food production variability may substantially advance price instability in local food markets. Government policy actions at addressing volatile food prices immediately after the 2007/2008 food crises appeared to enhance food price stability. These findings call for greater attention on management of monetary policy, including the exchange rates, ensuring stable petrol price, limiting food production instability, mitigating spill-over of price upsurges from international markets and building farmers and consumer’s resilience against food price changes, among others, as important pathways to address short and medium-term food price upsurges.

In the context of international food price fluctuations, agricultural economic development is usually subject to large shocks, which also leads to clear spatial–temporal differentiation in regional agricultural economic resilience. However, there is a paucity of retrievable studies on the evolutionary process of agricultural economic resilience and its impact mechanisms. Taking the impact of and disturbance caused by international food price fluctuations on the agricultural economy from 2005 to 2021 as the research background, this paper adopts the economic resilience analysis framework and selects gross agricultural output value indicators to measure the agricultural economic resilience of 12 cities in the main grain-producing areas in Northeast China–Sanjiang Plain and Songnen Plain. At the same time, the regression model is used to further analyze the spatial and temporal changes of agricultural economic resilience and the main influencing factors. Based on the results of the research, it can be concluded that: ① international food prices exert different degrees of influence on agricultural economic resilience at different stages. From 2005 to 2013, the agricultural economic resilience of the two plains changed less, and the resilience capacity performed better in both the period of falling and rising international food prices, while from 2014 to 2021, the agricultural economic resilience of the two plains changed more due to the great impact of international food price fluctuations, with a steep decline in resilience capacity in the period of falling international food prices from 2014 to 2017, followed by a rapid rebound between 2018 and 2021. ② There are differences in the resilience capacity of the agricultural economy in the main maize- and rice-producing areas. Although it is a fact that agricultural economic development in the two major plains is faster than the national average in most periods, the comparison reveals that the main corn-producing area (Songnen Plain) is more volatile and its resilience capacity is relatively weak in both periods of falling and rising food prices, while the main rice-producing area (Sanjiang Plain) is less volatile, indicating its relatively strong agricultural economic resilience capacity. ③ Factors affecting agricultural economic resilience behave differently over the three cycles. During the period of rising international food prices, indicators reflecting agricultural production capacity have a greater impact on agricultural economic resilience, while during the period of falling international food prices, indicators reflecting agricultural input intensity and agricultural support capacity have a greater impact on agricultural economic resilience.

The objective of this study is to empirically investigate: i) the extent in which shipping costs can cause and predict the food inflation in trinidad and tobago (t&t); ii) the extent in which international food prices can drive food inflation in T&T; and iii) the impact of the Russia-Ukraine conflict on food prices in t&t. As a fourth sub-objective, this study seeks to provide policy recommendations to address the food price inflation in t&t. A structural model is sought as it can use information about the past prices of the international food prices and shipping rates to forecast t&t's food price inflation. this study used monthly data on t&t retail price index food subcategory, the FAO Food Price Index (FFPI), and the Freightos Baltic Index over the January 2015 to November 2022 period. the Support Vector Regression (SVR) model was applied and used the FFPI and Freightos Baltic Index as the leading indicators to forecast t&t's food price inflation. this study found that the FAO Food Prices does and the Freightos Baltic Index does have an impact on food prices in t&t. Secondly, based on the FAO index and the Freightos Baltic Index, t&t's food price inflation should be 14.91% lower than its present value. third, in a Markov Switching regression, the war dummy was only significant in the second regime, statistically suggesting that the Russia-Ukraine conflict only had a short term effect on t&t's food prices. this contributed to the literature as it introduced a new test to investigate predictive causality. Policy measures to increase the agriculture output and address the food price inflation in t&t include adopting sustainable farming practices such as integrated pest management and the sustainable water management, and encouraging aquaponics. Received: 24 February 2023 | Revised: 13 March 2023 | Accepted: 14 March 2023 Conflicts of Interest The author declares that he has no conflicts of interest to this work.

Inflation is the sustained rise in the prices of commodities. Central Banks have the critical responsibility of ensuring price stability; however, every attempt should be made to ensure that price stability should not hit economic growth. Thus, it becomes imperative for Central Banks to determine the key fiscal and monetary factors that have the greatest impact on domestic price levels. Based on these factors, it can tackle the problem of inflation effectively and efficiently. Further, there are several global price indices and factors that need to be factored in while tackling the problem of inflation. The objective of the current study is to empirically determine the macroeconomic factors that play a significant role in influencing inflation in India. The study considers international food and oil price indices amongst other macroeconomic variables such as the fiscal deficit, index of industrial production, exchange rate, MIBOR, and money supply in order to explain inflation. Monthly data for each of the above variables were collected for the research period 2000-10. The study is based on Vector Auto-Regressive modeling. The Augmented Dickey-Fuller Unit Root Test was performed to test for stationarity of all of the time-series data. The results of the Granger causality tests indicate that fiscal indicators such as fiscal deficit and international factors such as international food and oil price indices play a significant role in influencing inflation. The research outcomes conform to the results of several earlier studies.