Food and Non-Food Prices Nexus in Developing Economies: Disaggregated Panel Data Analysis
In this paper, an attempt has been made to examine a new transmission mechanism of inflation that is effect of food prices on non-food prices. The panel generalized method of moment (GMM) has been employed on the panels of 47 developing countries disaggregated by income, i.e. low-income, lower-mi...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Johar Education Society
2018-12-01
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| Series: | Pakistan Journal of Commerce and Social Sciences |
| Subjects: | |
| Online Access: | http://jespk.net/publications/4319.pdf |
| _version_ | 1818537524009631744 |
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| author | Mujahid Zaman (Corresponding author) Rana Ejaz Ali Khan |
| author_facet | Mujahid Zaman (Corresponding author) Rana Ejaz Ali Khan |
| author_sort | Mujahid Zaman (Corresponding author) |
| collection | DOAJ |
| description | In this paper, an attempt has been made to examine a new transmission mechanism of
inflation that is effect of food prices on non-food prices. The panel generalized method of
moment (GMM) has been employed on the panels of 47 developing countries
disaggregated by income, i.e. low-income, lower-middle income and upper-middle
income countries. The data-set covers the time period of 2000 to 2014. The panel
Granger causality tests like error correction model, panel Stacked and Dumitrescu Hurlin
test of causality are also employed to see the direction of causality between food prices
and non-food prices. The results of panel GMM estimation indicate that food prices
positively affect non-food prices in all the income groups of economies. The causality
direction is also found from food prices to non-food prices in these groups of economies.
It concludes that inflation transmission mechanism of food prices to non-food prices
exists in developing countries. For policy making, it is suggested that any attempt to
control inflation in developing economies, one component of anti-inflationary policy
should be to control the food prices. |
| first_indexed | 2024-12-11T18:51:51Z |
| format | Article |
| id | doaj.art-e7f6297449314036a449b707838d030a |
| institution | Directory Open Access Journal |
| issn | 1997-8553 2309-8619 |
| language | English |
| last_indexed | 2024-12-11T18:51:51Z |
| publishDate | 2018-12-01 |
| publisher | Johar Education Society |
| record_format | Article |
| series | Pakistan Journal of Commerce and Social Sciences |
| spelling | doaj.art-e7f6297449314036a449b707838d030a2022-12-22T00:54:16ZengJohar Education SocietyPakistan Journal of Commerce and Social Sciences1997-85532309-86192018-12-01123865885Food and Non-Food Prices Nexus in Developing Economies: Disaggregated Panel Data AnalysisMujahid Zaman (Corresponding author) 0Rana Ejaz Ali Khan 1Department of Economics, The Islamia University of Bahawalpur, PakistanDepartment of Economics, The Islamia University of Bahawalpur, PakistanIn this paper, an attempt has been made to examine a new transmission mechanism of inflation that is effect of food prices on non-food prices. The panel generalized method of moment (GMM) has been employed on the panels of 47 developing countries disaggregated by income, i.e. low-income, lower-middle income and upper-middle income countries. The data-set covers the time period of 2000 to 2014. The panel Granger causality tests like error correction model, panel Stacked and Dumitrescu Hurlin test of causality are also employed to see the direction of causality between food prices and non-food prices. The results of panel GMM estimation indicate that food prices positively affect non-food prices in all the income groups of economies. The causality direction is also found from food prices to non-food prices in these groups of economies. It concludes that inflation transmission mechanism of food prices to non-food prices exists in developing countries. For policy making, it is suggested that any attempt to control inflation in developing economies, one component of anti-inflationary policy should be to control the food prices.http://jespk.net/publications/4319.pdffood pricesnon-food pricesgranger causalityinflation transmissionmoney supply |
| spellingShingle | Mujahid Zaman (Corresponding author) Rana Ejaz Ali Khan Food and Non-Food Prices Nexus in Developing Economies: Disaggregated Panel Data Analysis Pakistan Journal of Commerce and Social Sciences food prices non-food prices granger causality inflation transmission money supply |
| title | Food and Non-Food Prices Nexus in Developing Economies: Disaggregated Panel Data Analysis |
| title_full | Food and Non-Food Prices Nexus in Developing Economies: Disaggregated Panel Data Analysis |
| title_fullStr | Food and Non-Food Prices Nexus in Developing Economies: Disaggregated Panel Data Analysis |
| title_full_unstemmed | Food and Non-Food Prices Nexus in Developing Economies: Disaggregated Panel Data Analysis |
| title_short | Food and Non-Food Prices Nexus in Developing Economies: Disaggregated Panel Data Analysis |
| title_sort | food and non food prices nexus in developing economies disaggregated panel data analysis |
| topic | food prices non-food prices granger causality inflation transmission money supply |
| url | http://jespk.net/publications/4319.pdf |
| work_keys_str_mv | AT mujahidzamancorrespondingauthor foodandnonfoodpricesnexusindevelopingeconomiesdisaggregatedpaneldataanalysis AT ranaejazalikhan foodandnonfoodpricesnexusindevelopingeconomiesdisaggregatedpaneldataanalysis |