How to order
IMF Publications

Working Papers in full text
2015 2014 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

Inflation Responses to Commodity Price Shocks : How and Why Do Countries Differ?

Author/Editor: Gaston Gelos | Yulia Ustyugova
Authorized for Distribution: September 1, 2012
Electronic Access: Free Full Text (PDF file size is 660KB)
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: This paper relates the inflationary impact of commodity price shocks across countries to a broad range of structural characteristics and policy frameworks over the period 2001-2010, using several approaches. The analysis suggests that economies with higher food shares in CPI baskets, fuel intensities, and pre-existing inflation levels were more prone to experience sustained inflationary effects from commodity price shocks. Countries with more independent central banks and higher governance scores seem to have contained the impact of these shocks better. The effect of the presence of inflation targeting regimes, however, appears very modest and not evident during the 2008 food price shock.The evidence suggests that trade openness, financial development, dollarization, and labor market flexibility do not significantly influence the way in which domestic inflation responds to international commodity price shocks.
Order a print copy
Series: Working Paper No. 12/225
Subject(s): Commodity prices | External shocks | Governance | Inflation targeting
Author's keyword(s): inflation | commodity prices | pass-through | Phillips curve
    Published:   September 1, 2012        
    ISBN/ISSN:   9781475510249/1018-5941   Format:   Paper
    Stock No:   WPIEA2012225   Pages:   32
    Price:   US$18.00
Please address any questions about this title to