Working Papers in full text
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
All
Other research-related activities and publications of the IMF can be found at IMF Research
|
Free Email Notification
Receive emails when we post new
items of interest to you.
Subscribe or
Modify your profile
|
|
|
|
Reconsidering the Role of Food Prices in Inflation
|
Author/Editor: |
Walsh, James P |
| Authorized for Distribution: |
April 1, 2011 |
|
Electronic Access: |
Free Full Text (PDF file size is 1,668KB)
Use the free Adobe Acrobat Reader to view this PDF file.
|
|
|
|
Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.
|
|
Summary: Food prices are generally excluded from measures of inflation most closely watched by policymakers due either to their transitory nature or their higher volatility. However, in lower income countries, food price inflation is not only more volatile but also on average higher than nonfood inflation. Food inflation is also in many cases more persistent than nonfood inflation, and shocks in many countries are propagated strongly into nonfood inflation. Under these conditions, and particularly given high global commodity price inflation in recent years, a policy focus on measures of core inflation that exclude food prices can misspecify inflation, leading to higher inflationary expectations, a downward bias to forecasts of future inflation and lags in policy responses. In constructing measures of core inflation, policymakers should therefore not assume that excluding food price inflation will provide a clearer picture of underlying inflation trends than headline inflation.
|
|
|
|
Order a print copy
|
|
Series: |
Working Paper No. 11/71 |
|
Subject(s): |
Agricultural commodities | Commodity price fluctuations | Consumer price indexes | External shocks | Inflation | Low-income developing countries | Prices |
|
Author's keyword(s): |
inflation
| core inflation
| commodity prices food prices
| persistence
| inflation expectations
|
|
|
|
|
| |
Published: |
|
April 1, 2011 |
|
|
|
|
| |
|
|
|
|
Format: |
|
Paper |
| |
Stock No: |
|
WPIEA2011071 |
|
Pages: |
|
21 |
| |
Price: |
|
US$18.00
|
|
|
|
|
|
|
