Money, Meat, and Inflation: Using Price Data to Understand An Export Shock in Sudan
IMF Working Papers, May 1, 2002
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- Money, Meat, and Inflation: Using Price Data to Understand An Export Shock in Sudan
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Bibliographic details
- Authors: Rodney Ramcharan
- Published: May 1, 2002
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451850659.001
Summary and research question
- Sudanese inflation dramatically fell in 2000. Just prior to the sharp decline, an export ban was placed on Sudanese livestock.
- Motivated by this clue and the absence of reliable income or employment data, the paper systematically develops simultaneous models of the consumer price index (CPI) and the exchange rate to assess the economic impact of the export ban.
- Author: Rodney Ramcharan
- Date: May 1, 2002
- Working Paper No.: 2002/084
- Pages: 40
Methods and analytical approach
- Simultaneous models of the consumer price index (CPI) and the exchange rate are developed and estimated to infer the economic effects of the livestock export ban in the absence of reliable income/employment data.
Key findings
- Livestock exports play a large economic role as an important source of income and as a store of value.
- Long-run relationship:
- Livestock exports are positively associated with nonfood inflation.
- Short-run dynamics:
- Food price movements are negatively associated with livestock exports: to help smooth income, lower food prices generate increased livestock exports.
- Unable to export livestock, farmers may have flooded the local market with meat, lowering food prices.
- Aggregate demand and wealth effects:
- The loss of income and the decline in wealth lowered aggregate demand, leading to the decline in nonfood prices.
Policy-relevant implications
- Export restrictions on livestock can have broader macroeconomic effects beyond the targeted trade objective:
- They can depress farmer income and wealth, alter household smoothing behavior, and transmit to both food and nonfood price dynamics.
- Price and exchange rate data can be used to infer real-income and wealth effects where conventional income and employment statistics are lacking.
Subjects and keywords (as listed)
- Subject: Agricultural commodities, Commodities, Consumption, Exchange rates, Export earnings, Food prices, Foreign exchange, Inflation, International trade, National accounts, Prices
- Keywords: Agricultural commodities, Consumption, exchange rate, exchange rate movement, Exchange rates, export ban, Export earnings, food price inflation, Inflation, inflation differential, Livestock, livestock export revenue, Money, money growth, money price relationship, money supply, nonfood inflation, rate of depreciation, WP
Content in this bundle
- Money, Meat, and Inflation: Using Price Data to Understand an Export Shock in Sudan - WP/02/84