Understanding Inflation Dynamics: The Role of Global Shocks in CEMAC
IMF Working Papers, March 8, 2024
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- Understanding Inflation Dynamics: The Role of Global Shocks in CEMAC
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Bibliographic details
- Authors: Johanna Tiedemann, Olivier Bizimana, Lluis Dalmau, Martin Ambassa
- Published: March 8, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400269639.001
Research question and methods
- Examines the drivers of inflation dynamics and the contribution of global shocks to inflation persistence in CEMAC.
- Uses a Phillips curve framework combined with the local projections method.
Key findings on drivers of inflation
- Inflation in CEMAC surged more quickly and persistently than expected during the 2021–23 period.
- Global factors play a prominent role in driving inflation dynamics.
- The main global factors explaining the large variability in headline inflation are:
- Global commodity food price fluctuations
- Oil price fluctuations
- Shipping costs
Pass-through and persistence
- Global price shocks have sizable and persistent effects on domestic headline inflation.
- There are differences in the magnitude and speed of pass-through across global price shocks.
- The pass-through from commodity food price fluctuations to headline inflation is:
- Higher than that of other global price shocks
- More persistent than that of other global price shocks
- Rationale: the large share of food in consumption baskets increases vulnerability to direct effects of international food shocks and generates larger second-round effects.
Publication and metadata
- Authors: Johanna Tiedemann, Olivier Bizimana, Lluis Dalmau, Martin Ambassa
- Date: March 8, 2024
- Series: Working Paper No. 2024/055
- Volume: 2024
- Issue: 055
- Pages: 39
- DOI: https://doi.org/10.5089/9798400269639.001
- Stock No: WPIEA2024055
- ISBN: 9798400269639
- ISSN: 1018-5941
- Subjects: Commodity price shocks; Commodity prices; Food prices; Inflation; Oil prices; Prices
- Keywords: baseline result; CEMAC; commodity food price fluctuation; Commodity price shocks; commodity prices; Food prices; Global; Inflation; inflation development; inflation dynamics; inflation expectation; Oil prices; Phillips curve; price shock; shipping costs; underlying inflation
IMF Working Papers — Understanding Inflation Dynamics: The Role of Global Shocks in CEMAC (Working Paper No. 2024/055).
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