Sources of recent inflationary pressures and interlinkages between food and non-food prices in Ethiopia

This study investigates the main sources of recent inflationary pressures from 1999Q1 to 2019Q4 using linear and non-linear Auto-Regressive Distributed Lag (ARDL) Models. It also examines the pass-through effects and causality between food and non-food prices using Dynamic Ordinary Least Square (DOL...

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Autores principales:	Helen Demeke, Dagmawe Tenaw
Formato:	article
Lenguaje:	EN
Publicado:	Elsevier 2021
Materias:	Food inflation Non-food inflation Pass-through effects Non-linear ARDL Ethiopia Science (General) Q1-390 Social sciences (General) H1-99
Acceso en línea:	https://doaj.org/article/c161cd33575d49a88ad44ef2dfe549a6
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spelling	oai:doaj.org-article:c161cd33575d49a88ad44ef2dfe549a62021-12-02T05:02:54ZSources of recent inflationary pressures and interlinkages between food and non-food prices in Ethiopia2405-844010.1016/j.heliyon.2021.e08375https://doaj.org/article/c161cd33575d49a88ad44ef2dfe549a62021-11-01T00:00:00Zhttp://www.sciencedirect.com/science/article/pii/S2405844021024786https://doaj.org/toc/2405-8440This study investigates the main sources of recent inflationary pressures from 1999Q1 to 2019Q4 using linear and non-linear Auto-Regressive Distributed Lag (ARDL) Models. It also examines the pass-through effects and causality between food and non-food prices using Dynamic Ordinary Least Square (DOLS) estimation and Toda-Yamamoto Granger Causality approach. The main findings of this study indicate that inflation expectation, money supply growth, world food price, real income, and food supply are found as the main short-run and long-run drivers of food inflation. While, non-food inflation appears to be mainly explained by expected inflation, exchange rate, administered price, and world non-food price level. The results further reveal that exchange rate, real income, world price, and food supply have asymmetric effects on the overall inflationary process. On the other hand, evidence of second-round effects between food and non-food prices is confirmed although a strong and long-lasting effect comes from food prices. The Granger causality test results also support a two-way causality between the two price groups. After all, this study suggests considering the specific behaviors and sources of food and non-food prices, as well as the transmission effects between them so as to effectively control the underlying inflationary shocks and maintain price stability in the economy.Helen DemekeDagmawe TenawElsevierarticleFood inflationNon-food inflationPass-through effectsNon-linear ARDLEthiopiaScience (General)Q1-390Social sciences (General)H1-99ENHeliyon, Vol 7, Iss 11, Pp e08375- (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Food inflation Non-food inflation Pass-through effects Non-linear ARDL Ethiopia Science (General) Q1-390 Social sciences (General) H1-99
spellingShingle	Food inflation Non-food inflation Pass-through effects Non-linear ARDL Ethiopia Science (General) Q1-390 Social sciences (General) H1-99 Helen Demeke Dagmawe Tenaw Sources of recent inflationary pressures and interlinkages between food and non-food prices in Ethiopia
description	This study investigates the main sources of recent inflationary pressures from 1999Q1 to 2019Q4 using linear and non-linear Auto-Regressive Distributed Lag (ARDL) Models. It also examines the pass-through effects and causality between food and non-food prices using Dynamic Ordinary Least Square (DOLS) estimation and Toda-Yamamoto Granger Causality approach. The main findings of this study indicate that inflation expectation, money supply growth, world food price, real income, and food supply are found as the main short-run and long-run drivers of food inflation. While, non-food inflation appears to be mainly explained by expected inflation, exchange rate, administered price, and world non-food price level. The results further reveal that exchange rate, real income, world price, and food supply have asymmetric effects on the overall inflationary process. On the other hand, evidence of second-round effects between food and non-food prices is confirmed although a strong and long-lasting effect comes from food prices. The Granger causality test results also support a two-way causality between the two price groups. After all, this study suggests considering the specific behaviors and sources of food and non-food prices, as well as the transmission effects between them so as to effectively control the underlying inflationary shocks and maintain price stability in the economy.
format	article
author	Helen Demeke Dagmawe Tenaw
author_facet	Helen Demeke Dagmawe Tenaw
author_sort	Helen Demeke
title	Sources of recent inflationary pressures and interlinkages between food and non-food prices in Ethiopia
title_short	Sources of recent inflationary pressures and interlinkages between food and non-food prices in Ethiopia
title_full	Sources of recent inflationary pressures and interlinkages between food and non-food prices in Ethiopia
title_fullStr	Sources of recent inflationary pressures and interlinkages between food and non-food prices in Ethiopia
title_full_unstemmed	Sources of recent inflationary pressures and interlinkages between food and non-food prices in Ethiopia
title_sort	sources of recent inflationary pressures and interlinkages between food and non-food prices in ethiopia
publisher	Elsevier
publishDate	2021
url	https://doaj.org/article/c161cd33575d49a88ad44ef2dfe549a6
work_keys_str_mv	AT helendemeke sourcesofrecentinflationarypressuresandinterlinkagesbetweenfoodandnonfoodpricesinethiopia AT dagmawetenaw sourcesofrecentinflationarypressuresandinterlinkagesbetweenfoodandnonfoodpricesinethiopia
_version_	1718400735559811072

Sources of recent inflationary pressures and interlinkages between food and non-food prices in Ethiopia

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