Template-Type: ReDIF-Paper 1.0
Author-Name: Emanuel Kohlscheen
Author-X-Name-First: Emanuel
Author-X-Name-Last: Kohlscheen
Title: Understanding the Food Component of Inflation
Abstract: This article presents evidence based on a panel of 35 countries over the past 30 years that the Phillips curve relation holds for food inflation. That is, broader economic overheating does push up the food component of the CPI in a systematic way. Further, general inflation expectations from professional forecasters clearly impact food price inflation. The analysis also quantifies the extent to which higher food production and imports, or lower food exports, reduce food inflation. Importantly, the link between domestic and global food prices is typically weak, with pass throughs within a year ranging from 0.07 to 0.16, after exchange rate variations are taken into account.
Length: 22 pages
Creation-Date: 2022-12
File-URL: https://www.bis.org/publ/work1056.pdf
File-Format: Application/pdf
File-Function: Full PDF document
File-URL: https://www.bis.org/publ/work1056.htm
File-Format: text/html
Number: 1056
Keywords: crop, expectations, energy, food export, food prices, food import, food production, forecast, inflation, output gap, Phillips curve
Classification-JEL: E30, E31, E32, E50, F14, Q00
Handle: RePEc:bis:biswps:1056