Price Inflation Research Articles

Consumer Out-Of-Pocket Drug Prices Grew Faster Than Prices Faced By Insurers After Accounting For Rebates, 2007-20.

The rising price of branded drugs has garnered considerable attention from the public and policy makers. This article investigates the complexities of pharmaceutical pricing, with an emphasis on the overlooked aspects of manufacturer rebates and out-of-pocket prices. Rebates granted by pharmaceutical manufacturers to insurers reduce the actual prices paid by insurers, causing the true prices of prescriptions to diverge from official statistics. We combined claims data on branded retail prescription drugs with estimates on rebates to provide new price index measures based on pharmacy prices, negotiated prices (after rebates), and out-of-pocket prices for the commercially insured population during the period 2007-20. We found that although retail pharmacy prices increased 9.1percent annually, negotiated prices grew by a mere 4.3percent, highlighting the importance of rebates in price measurement. Surprisingly, consumer out-of-pocket prices diverged from negotiated prices after 2016, growing 5.8percent annually while negotiated prices remained flat. The concern over drug price inflation is more reflective of the rapid increase in consumer out-of-pocket expenses than the stagnated inflation of negotiated prices paid by insurers after 2016.

Analisis Pengaruh Faktor Inflasi dan Indeks Harga Konsumen Terhadap Nilai Tukar Petani Subsektor Peternakan di Provinsi Jambi Periode Tahun 2014-2022

The purpose of this research is to see the development of the Farmer Exchange Rate (NTP) of the Livestock Subsector and to determine the effect of the Consumer Price Index (CPI) and inflation on the NTP of the Jambi Province livestock subsector during the 2014-2022 time span. The data used in this study are secondary data from the Central Statistics Agency (BPS). Data analysis uses a computer with the help of Eviews software to test the factors that affect the NTP of the livestock subsector using the multiple linear regression method. The results of the analysis show that the CPI has a significant effect on the NTP of the livestock subsector while inflation does not affect it. It can be concluded that the NTP of livestock subsector in Jambi Province tends to decrease and is significantly influenced by CPI but not by inflation.

How do Economic Growth and Food Inflation Affect Food Insecurity?

How do Economic Growth and Food Inflation Affect Food Insecurity?

The Macroeconomic Impact of Crude Oil Price Fluctuations in Nigeria

The main objective of the study was to determine the way fluctuations in the price of crude oil affected macroeconomic variables in Nigeria from 2000 Q1 to 2022 Q4. The data was analysed in the paper using Structural Vector Autoregressive (SVAR) models. According to the findings, Nigeria's current economic growth has been significantly impacted by lag GDP values. This indicates that economic growth in Nigeria was significantly impacted by one-period lag GDP by 3,791.7 units in the short-run and 7,430.4 units in the long-run. Also in the short-run, the current broad money supply was significantly impacted by both the one-period lag general price level (0.445 units) and the one-quarter lag broad money supply (757.7 units). According to the crude oil price fluctuation model, current crude oil price variations in Nigeria are significantly influenced by one-period lags in general price level (-64.9 units), crude oil price fluctuation (1,114.6 units), and fiscal budget deficits (0.65 units). All of the one-period lagged coefficients of macroeconomic variables, including real GDP, broad money supply, interest rates, general price level, inflation rates, and fiscal budget deficits, had a significant impact on current economic growth and broad money supply, respectively, as demonstrated by the long-run economic growth and broad money supply models. The real GDP's impulse response to fluctuations in crude oil prices fell during the first period, peaked during the second, and then increased to show a positive trend during the third. This study came to the conclusion that shocks or fluctuations in the price of crude oil are the main cause of macroeconomic policy instability in Nigeria. The study recommended that the government should control foreign exchange rate regimes, pursue expansionary monetary policy, general price level control and stabilisation measures.

The effect of hydropower bidding strategy on the iberian day-ahead electricity market

In 2021, the Iberian Electricity Market, which includes Portugal and Spain, experienced a significant increase in electricity prices. On average, prices tripled compared to pre-pandemic levels in 2019, despite stable demand. This trend, though less pronounced in other European markets, has raised concerns about the efficiency and competitiveness of wholesale electricity markets. This study investigates the bidding behavior of non-pumped hydropower plants in the Iberian market, employing a merit order model based on real data from 2019 to 2021. The analysis reveals a clear mismatch between hydropower bid prices and actual production costs. Although this practice is legal, it conflicts with the European Union's goal of promoting fair competition within the internal electricity market.Our findings suggest that aligning hydropower bid prices with 2019 levels could have reduced annual market costs by approximately 2324 million euros under a moderate scenario. This indicates substantial potential for cost savings and improved integration of hydropower. However, this strategy also benefits companies that own these hydropower plants, as they often possess large portfolios and can capitalize on increased market prices through other plants, particularly renewable energy units, which offer electricity at very low prices and have a high likelihood of being dispatched.Furthermore, the study highlights regulatory gaps allowing hydropower plants to price low-cost energy similarly to thermal plants, raising consumer costs and distorting market dynamics. These findings emphasize the need for stronger regulatory oversight and reforms to prevent excessive price inflation by hydropower, which plays a critical role in renewable energy integration and grid stability. Policymakers must ensure fair pricing while compensating hydropower plants for their flexibility and essential contributions to the energy system.

Impact of food price inflation on stunting in under five aged children in Bangladesh

BackgroundCurrently, food price inflation is a widespread issue in Bangladesh as well as the rest of the world. Malnutrition is a common issue among children that can have long-lasting effects on their development and overall health. There have been lots of studies conducted to identify the factors responsible for child malnutrition, but inflation is rarely considered a factor in child malnutrition. We aimed to determine the relationship between food price inflation and stunting (Height-for-Age Z-score (HAZ)) in children under five years of age in Bangladesh.MethodThe study utilized food price data from the World Food Programme database and malnutrition (stunting) information from the 2014 and 2017-18 Bangladesh Demographic Health Surveys (BDHS). This includes the total study period from 2009 to 2018. Food prices were linked to the BDHS dataset using each child’s birth month. For each child, the average food prices from 9 months prior to 5 months post-birth, including their birth month, were recorded to calculate month-to-month inflation. This inflation was computed for rice (coarse), oil, wheat flour, and lentils by comparing the price sum of each item from one month to the previous month and dividing by the total price of the preceding month. A generalized linear regression model was used to assess the relationship between food price inflation and stunting, with stunting as the dependent variable. Other explanatory variables included wealth index, sex of the child, height, weight, mother’s education, respondent’s current pregnancy, and breastfeeding status.ResultsOur study has revealed that food price inflation has a significant negative effect on stunting, with a coefficient of -0.127 (p < 0.001). Furthermore, we have identified several other factors that have also significantly negative associations with stunting, including the wealth index (p < 0.001), mother’s education level (p < 0.001), mother’s pregnancy status (p < 0.001), breastfeeding (p < 0.001), child’s age (p < 0.001). child’s weight (p < 0.001) has significantly positive effect on stunting. However, we did not find any significant differences in stunting between boys and girls.ConclusionIn conclusion, the findings of this study underscore the significant negative impact of food price inflation on child stunting, emphasizing the need to acknowledge this factor alongside others. These results highlight the critical role of addressing food price inflation as a key determinant of stunting, in conjunction with various other contributing factors, in efforts to combat childhood malnutrition.

A Comprehensive Review of the Factors and Strategies to Mitigate Construction Projects Delays in Saudi Arabia

Background The construction industry in Saudi Arabia faces numerous challenges that hinder its progress due to frequent and prolonged project delays. Objective The specific objectives of this study are (1) (1) To analyze the factors contributing to construction project delays in Saudi Arabia, (2) To identify the risk of factors contributing to construction project delays, and (3) To propose strategies to mitigate construction project delays in Saudi Arabia. Methods The study reviewed 16 articles to identify and suggest solutions for construction project delays in Saudi Arabia. Results There are 140 factors of delay found and seven pose unacceptable risks including delays due to material delivery, delays in approval of submittals, design drawings, shop drawings, and sample materials (making decisions), delays related to subcontractors work, inflation and escalation of material prices (changes in price), lack of coordination with contractors, shortage of construction materials (non-availability of material), and equipment shortages. The risk assessment can be conducted using the Bowtie diagram, scenario analysis, MRM, and MCS separately or collectively to get a new and improved model. Conclusion This review will contribute to the development of strategies to enhance the performance of ongoing and future construction projects in the region. Additionally, decision-makers can utilize the outcomes to strategically allocate resources and improve construction project success.

Wage Growth, Labor Market Tightness, and Inflation: A Service Sector Analysis

This Economic Commentary explores the connections among labor market tightness, wage inflation, and price inflation at the service sector level. Across most service sectors, sector-specific labor market tightness and nominal wage growth have been above prepandemic averages since 2022. The data suggest that a stronger positive relationship between labor market tightness and wage growth has emerged in the aftermath of the pandemic. The relationship between sector-specific wage growth and inflation is more varied. In the education and health services sector, higher wage growth is associated with higher inflation after about one year; in the leisure and hospitality services sector, the positive relationship is contemporaneous. I do not find a significant relationship between wage growth and inflation in the other service sectors, such as transportation or financial and business services.

Influence of the Surrounding Environment Steam Power Plant (PLTU) Kema Satu Village, Kema District, North Minahasa District

In today's era, it is important to understand the impact of Steam Power Plant (PLTU) operations on the environment and economy around the plant site, especially in Kema Satu Village. PLTUs, which harness the kinetic energy of steam from geothermal heat, are widely used due to their ease of operation and accessibility of fuel. However, they also have significant impacts, both positive and negative, on local communities. This study aims to assess the environmental and economic impacts of PLTU Sulut 3 on the surrounding area, evaluate its operational efficiency, and determine its contribution to stabilizing and improving electricity supply in North Sulawesi and Gorontalo. The research method used was a combination of qualitative and quantitative techniques to ensure a comprehensive analysis. Data was collected through observation, interviews, and analysis of relevant secondary data. The results show that the PLTU in Kema Satu Village has significant impacts on the local environment, including air and water pollution, soil degradation, and ecosystem disruption. In addition to providing electricity supply and employment opportunities for the local community, the PLTU has also triggered property price inflation and shifts in the local economy. Other negative impacts include damage to the local agricultural sector and increased greenhouse gas emissions. The implications of this study emphasize the need for careful planning, community involvement, and the implementation of sustainable practices to mitigate negative effects on residents and the environment.

Food Inflation in Brazil in the Last Decade – Comparing Evolution Trends Before and During the COVID-19 Pandemic

Abstract The objective is to characterize food inflation in general and, particularly, the food items and agrifood chains, according to the level of exposure to foreign trade, degree of processing, and inflation indicators in nine metropolitan areas of Brazil between 2007 and 2022. Basically, the data used were surveyed by the Brazilian Institute of Geography and Statistics for the Broad Consumer Price Index (Índice de Preços ao Consumidor Amplo, IPCA). The study fully characterized the food inflation in Brazil between 2007 and 2022, which was aggravated during the Covid-19 pandemic. Food-at-home inflation was generalized among its household components. Items associated with animal protein tended to put the most pressure on food-at-home prices. Among the agrifood chains, the lowest price variations were observed in products with greater exposure to foreign trade. A greater price variation was observed for fresh or minimally processed food products compared to more processed food products. Among the nine cities studied, from all regions of Brazil, no major differences were found in the variations of food prices of all groups considered.

Geopolitical risks, institutional environment, and food price inflation

ABSTRACT This study investigates the relationship between heightened geopolitical risks and food price inflation using a panel data model that includes 33 countries from 2001 to 2020. Key findings show that geopolitical risks significantly raise the level of food price inflation, with a more pronounced effect observed in developing countries, and a reduced effect in countries characterized by high levels of individualism and masculinity. Furthermore, the effect of geopolitical risks on food inflation is moderated during economic booms and amid climate change concerns. In addition, we find that countries with strong connections to major food producers experience less impact from geopolitical risks. The study concludes that geopolitical risks are a crucial factor in food price inflation, particularly for vulnerable countries, suggesting that they should incorporate geopolitical considerations into their economic policies and strengthen ties with major food producers to mitigate this risk.

Transition toward Sustainability in the Moroccan Food System: Drivers, Outcomes, and Challenges

Nowadays, food systems are undergoing major transformations to achieve the 2030 Sustainable Development Goals (SDGs). However, there are a lack of comprehensive reviews on this topic in developing countries. This work highlights food systems’ transition towards sustainability, focusing on Morocco. It was carried out through searching, selecting, evaluating, and synthesizing existing relevant scholarly and gray literature. In Morocco, a meaningful transition towards sustainability is being guided and carried out on several levels, despite numerous challenges, e.g., inability to cope with the detrimental effects of climate change and escalating water scarcity constitute fundamental problems. However, there are conflicting views on the outcomes of food system transformation. Some studies showed that Morocco has increased its agri-food export and reduced poverty to less than 5% of the population over the past decade; the proportion of wasted and malnourished children has declined from 25 to 15% and 4 to 3%, respectively, and the 2023 Global Hunger Index (GHI) showed a score of 9.0. Other studies showed that North Africa has entered a food security crisis; specifically, food inflation has reached unprecedented levels in Morocco. This paper provides valuable insights for policymakers and planners to design evidence-based policies and strategies to boost sustainable development in Morocco.

The Impact of Remittances on Food Inflation in Bangladesh: An ARDL Approach

Purpose of the study: This study aims to investigate how Bangladesh's food inflation is affected by remittance influx. Methodology: The analysis utilizes secondary data collected from 2005 to 2022. In order to accomplish the goals, this study employs the food inflation rate as an endogenous variable, while workers' remittance, official exchange rate, and broad money supply are used as exogenous factors. The data is sourced from the World Development Index (WDI). In this investigation, co-integration is assessed using the Autoregressive Distributed Lag (ARDL) model to provide an accurate outcome. Findings: The study's findings show that, both in the short and long term, the influx of remittances from migrants has a positive and considerable impact on driving up food inflation. This analysis shows that while having a negative short-term impact, the money supply and exchange rate have a long-term, positive, and considerable influence on food inflation. Application of the Study: This research proposes that promoting agricultural output and motivating recipients of remittances to invest in income-generating activities can effectively reduce their reliance on food consumption. If these recommendations are effectively followed, the inflow of workers' remittances will have a positive impact on the economy and contribute to reducing inflationary challenges. Originality of the study: By employing the most recent data set and cutting-edge methodology, the present research adds to the body of available research by demonstrating a link between food inflation and remittances.

Analysis of Sustainable Food Sector Development in the Sumatra Island

The research aims to analyze the development of food security through indicators of the sustainable food sector on the island of Sumatra in 2018-2022. Food sector indicators include the number of poor people, food inflation, rice consumption per capita, insufficient food consumption, and food insecurity. Food security indicators use the food security index. The research method is quantitative through secondary data collection with panel data analysis from cross section results of 10 provinces on the island of Sumatra and time series data for 2018-2022. The approach used, namely CEM,FEM, REM. The research findings show that the food inflation variable has a positive and significant effect on the food security index, the poor population variable, rice consumption per capita, insufficient food consumption has a positive and insignificant effect on the food security index. Population with food insecurity has a negative and insignificant effect on the food security index.

Prices and returns: Role of inflation

We find that the market dividend yield and earnings yield can positively predict future inflation internationally. The inflation predictability of price ratios could invert the standard asset pricing predictive results. For example, dividend yields do forecast real dividend growth but not nominal dividend growth. We extend the analysis to the earnings yield as a robust analysis and document a similar predictive pattern. Further term structure analysis suggests that the financial ratio variation decomposition also differs significantly in nominal and real terms. In nominal-term decomposition, discount rate news is found to be the primary contributor to variations in price ratios while in real-term decomposition, cash flow news plays a more significant role, with its importance increasing over longer investment horizons. Our study utilizes consistent inflation predictability evidence in advanced economies to re-evaluate the global relationship between price ratios and inflation. We confirm that inflation is an international state variable in post-1970s samples and that the correlation between inflation and price ratios can almost entirely be attributed to the relationship between expected inflation and future growth prospects. This finding offers an explanation for the previously puzzling correlation between the dividend-price ratio and future inflation.

Inflation comovement in emerging economies: The facts and impact of global prices

The traditional notion that inflation is a domestic monetary phenomenon has been challenged by the existence of global inflationary factors that cause inflation comovement patterns. Understanding and estimating such comovement and its drivers is critical for effective policymaking. This study analyzes the temporal pattern and determining factors of inflation comovement of Commonwealth of Independent States (CIS) countries, comparing it to other former Eastern Bloc economies that entered the European Union (EU), and to other groups of advanced economies. We use monthly data on 26 countries classified into four groups and examine headline, core, food and utilities inflation from December 2006 to October 2021. We find that inflation comovement increased over the study period for all inflation categories, except food inflation, for all groups of countries, with comovement in CIS countries being the lowest. Moreover, positive changes in global energy prices significantly impact CIS inflation comovement, but not negative changes.

The economic and fiscal transition costs of global climate mitigation in fossil fuel export dependent economies

Global decarbonization has large implications for trade and financial flows, and with few economies likely to be more affected than those relying heavily on exporting fossil fuels. This study first identifies 40 highly fossil fuel dependent economies and then, through several empirical strategies, examines the potential implications for oil rents, public finances and economic growth from global decarbonization. First, it is estimated that as a group, countries would lose more than 60 percent of oil rents alone, or between (present value adjusted) US$12–14 trillion, for the period 2023–2040 under a global ‘net-zero 2050’ versus a ‘business as usual’ scenario, - a loss equivalent in size to between 120 and 142 percent of GDP. Second, local projections model estimates suggest that there are large and persistent adverse growth and fiscal impacts associated with global decarbonization in emerging market and developing economy oil exporters. Here, a 10 percentage point (pp) decrease in (real) oil price inflation is associated with a decline of 1.58 percent in (real) GDP four periods after the shock; a decrease in annual government revenue (as a percentage of GDP) by between 0.6 and 0.8 pp and; an addition of about 0.5 pp to government debt per year. Finally, the study discusses relative vulnerabilities, and the domestic and international policy options needed to mitigate transition cost. Aside from a handful of primarily high-income countries, most countries have little or no savings to help them cushion an inevitable steep fall in demand for their main export and source of revenue, and more than one third of countries are characterized by either low or medium levels of human development. Whereas several countries are relatively well positioned to successfully mitigate the transition cost provided urgently prioritized domestic reforms, a substantial subgroup of countries will need international assistance to avoid potentially large negative socio-economic consequences.

Wage–price spirals: what is the historical evidence?

AbstractHow common are wage–price spirals, and what has happened in their aftermath? We construct a new historical database of wage–price spirals—identified as episodes with consumer price inflation and average nominal wage growth rising jointly for at least a year—going back to the 1960s for a large sample of advanced economies. We find that only about a quarter of such episodes were followed by sustained accelerations in wages and prices. Instead, nominal wage growth and inflation tended to stabilize at a higher level on average, and then gradually revert, with real wage growth broadly unchanged. A decomposition of average wage dynamics during wage–price spiral episodes using a wage Phillips curve suggests that nominal wage growth normally stabilizes at levels consistent with observed inflation and labour market tightness. After historical episodes exhibiting rising inflation, falling real wages, and tightening labour markets—similar to what was observed in the early post‐COVID‐19 recovery in 2021—inflation tended to decline and nominal wage growth to rise, allowing real wages to gradually catch up. Our findings suggest that an acceleration of nominal wages against a backdrop of rising inflation does not necessarily signal that a persistent wage–price spiral dynamic is taking hold.

Functional Oil Price Expectations Shocks and Inflation

ABSTRACTThis paper investigates the inflation effects of oil price expectations shocks constructed as functional shocks, that is, as shifts in the entire oil futures term structure (both standard and risk‐adjusted). The latter are then included in a vector autoregressive model with exogenous variables (VARX) to examine the US case. Counterfactual analysis is also carried out to investigate second‐round effects on inflation through the inflation expectations channel. These are found to be significant, in contrast to earlier studies based on standard oil price shocks. Additional nonlinear local projections including a shock decomposition exercise show that inflation and inflation expectations are primarily driven by changes in the curvature (level and slope) factor when the latter are anchored (unanchored). These findings provide useful information to policymakers concerning the impact of oil price expectations on inflation and inflation expectations.

The post-COVID inflation episode

This study examined the recent inflation episode in the US using an estimated NK-DSGE model with endogenous unemployment fluctuations. We find that the US price inflation accelerated due to a sudden wage increase during the COVID-19 lockdown, the 2021 expansionary monetary policy, and price-push shocks in the quarters of a global surge in energy costs. The disinflation path predicts that further indexing prices or wages to lagged inflation will lead to higher wage inflation and slower price disinflation. Moreover, severely tightening the Fed’s monetary policy will only slightly reduce inflation but increase unemployment.