## How do Economic Growth and Food Inflation Affect Food Insecurity?

_IMF Working Papers, September 6, 2024_

## Source details

**Canonical URL:** [How do Economic Growth and Food Inflation Affect Food Insecurity?](https://www.imf.org/en/publications/wp/issues/2024/09/06/how-do-economic-growth-and-food-inflation-affect-food-insecurity-554563)

## Other formats

- [Markdown version](/en/publications/wp/issues/2024/09/06/how-do-economic-growth-and-food-inflation-affect-food-insecurity-554563/index.md)
- [Structured JSON version](/en/publications/wp/issues/2024/09/06/how-do-economic-growth-and-food-inflation-affect-food-insecurity-554563/index.json)
- [Bundle manifest](/en/publications/wp/issues/2024/09/06/how-do-economic-growth-and-food-inflation-affect-food-insecurity-554563/bundle-manifest.json)

## Bibliographic details
- Authors: Christian Bogmans, Andrea Pescatori, Ervin Prifti
- Published: September 6, 2024
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798400287336.001

---

### Summary
- During the global recession of 2020 food insecurity increased substantially in many countries around the world.
- The surge in food insecurity quickly came to a halt as the world economy returned to its positive growth path, despite double-digit domestic food inflation in most countries.
- The study employs a heterogeneous-agent model with income inequality, complemented by novel cross-country data for the period 2001-2021.
- External instruments used to isolate exogenous variation include changes in commodity terms-of-trade, external economic growth, and harvest shocks.
- Main high-level conclusion: income growth is the dominant driver of annual variations in food insecurity, while food price inflation plays a somewhat smaller role, aligning with model predictions.

### Methodology
- Model: heterogeneous-agent model with income inequality.
- Data: novel cross-country panel covering the period 2001-2021.
- Identification strategy: use of external instruments to isolate exogenous variation in domestic income growth and food inflation:
  - changes in commodity terms-of-trade
  - external economic growth
  - harvest shocks

### Key Findings and Evidence
- The global recession of 2020 caused substantial increases in food insecurity in many countries.
- Recovery in global economic growth halted the surge in food insecurity even though most countries experienced double-digit domestic food inflation.
- Empirical results and model predictions converge on the relative importance of drivers:
  - Income growth is the dominant driver of annual variations in food insecurity.
  - Food price inflation has a somewhat smaller but non-negligible role.

---

## Content in this bundle

- **Working Paper**
  - [Working Paper (Markdown version)](/-/media/files/publications/wp/2024/english/wpiea2024188-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Working Paper (PDF)](/-/media/files/publications/wp/2024/english/wpiea2024188-print-pdf.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2024/09/06/how-do-economic-growth-and-food-inflation-affect-food-insecurity-554563_