Pub Date : 2017-08-22DOI: 10.16980/jitc.13.4.201708.161
Hyun-Soo Kang
China, with the largest population in the world, has always been concerned about its food security. Recently, rapid economic growth in China has led to the disappearance of absolute hunger, but an increase in food consumption and environmental problems still threaten the maintenance of China’s food security. This study aims to analyze the effects of main factors on Chinese food security and investigates the inverted U-shaped relationship using the extended environmental Kuznets curve (EKC) on 1980-2013 time series data. The results found to be robust across different methods including vector autoregressive (VAR) model, impulse response function (IRF), and Granger causality test. The main findings of this study are (1) an inverted U-shaped relationship exists between Chinese food security and main factors (economic growth, agricultural trade, and CO2), (2) there is a positive impact of economic growth on food security but negative impact of agricultural trade and CO2 on food security with respect to the linear relationship, and (3) there is Granger causality between the main factors and food security. Based on the analysis, this study suggests that the Chinese government needs to continue investment in agriculture, environmental regulations, and the expansion of domestic agricultural production base to improve its food security.
{"title":"Food Security, International Agricultural Trade, and Economic Growth in China","authors":"Hyun-Soo Kang","doi":"10.16980/jitc.13.4.201708.161","DOIUrl":"https://doi.org/10.16980/jitc.13.4.201708.161","url":null,"abstract":"China, with the largest population in the world, has always been concerned about its food security. Recently, rapid economic growth in China has led to the disappearance of absolute hunger, but an increase in food consumption and environmental problems still threaten the maintenance of China’s food security. This study aims to analyze the effects of main factors on Chinese food security and investigates the inverted U-shaped relationship using the extended environmental Kuznets curve (EKC) on 1980-2013 time series data. The results found to be robust across different methods including vector autoregressive (VAR) model, impulse response function (IRF), and Granger causality test. The main findings of this study are (1) an inverted U-shaped relationship exists between Chinese food security and main factors (economic growth, agricultural trade, and CO2), (2) there is a positive impact of economic growth on food security but negative impact of agricultural trade and CO2 on food security with respect to the linear relationship, and (3) there is Granger causality between the main factors and food security. Based on the analysis, this study suggests that the Chinese government needs to continue investment in agriculture, environmental regulations, and the expansion of domestic agricultural production base to improve its food security.","PeriodicalId":365834,"journal":{"name":"Food Laws","volume":"54 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129909979","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This dataset includes annual data on agricultural production, prices, trade and derived policy indicators for various commodities and nine European countries since the second half of the 19th century until the countries joined the EU. The countries are Belgium, France, UK, Netherlands, Germany, Finland, Sweden, Spain and Italy. The data was collected from a variety of sources, mostly national statistics, and the commodity and time coverage varies between countries.
{"title":"A Historical Database on European Agriculture, Food and Policies","authors":"J. Swinnen","doi":"10.2139/SSRN.3052257","DOIUrl":"https://doi.org/10.2139/SSRN.3052257","url":null,"abstract":"This dataset includes annual data on agricultural production, prices, trade and derived policy indicators for various commodities and nine European countries since the second half of the 19th century until the countries joined the EU. The countries are Belgium, France, UK, Netherlands, Germany, Finland, Sweden, Spain and Italy. The data was collected from a variety of sources, mostly national statistics, and the commodity and time coverage varies between countries.","PeriodicalId":365834,"journal":{"name":"Food Laws","volume":"22 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126162955","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper recommends that the FDA enforce the existing statutory mandate against EMA for the benefit of consumers in a smart, efficient manner by setting enforcement priorities and by collaborating with science experts and the food industry. The paper also recommends that the food industry address food fraud by embracing the norm of food authenticity and establishing self-governance rules as it has done so with sustainability. Last, the paper proposes specific changes in litigation against food fraud.
{"title":"The Pursuit of Food Authenticity: Recommended Legal and Policy Strategies to Eradicate Economically Motivated Adulteration (Food Fraud)","authors":"M. Roberts, Whitney Turk","doi":"10.2139/SSRN.2947347","DOIUrl":"https://doi.org/10.2139/SSRN.2947347","url":null,"abstract":"The paper recommends that the FDA enforce the existing statutory mandate against EMA for the benefit of consumers in a smart, efficient manner by setting enforcement priorities and by collaborating with science experts and the food industry. The paper also recommends that the food industry address food fraud by embracing the norm of food authenticity and establishing self-governance rules as it has done so with sustainability. Last, the paper proposes specific changes in litigation against food fraud.","PeriodicalId":365834,"journal":{"name":"Food Laws","volume":"4 2 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-03-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116744402","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper explores how New Zealand should address agricultural greenhouse gas emissions: methane and nitrous oxide. The starting point is the internationally agreed-upon goal of limiting global warming to below two degrees, and New Zealand’s commitment to contribute its ‘fair share’ to the international climate-change mitigation effort. The report focuses on the role of mitigating biological agricultural emissions within that, and how New Zealand could most cost-effectively mitigate its own emissions and contribute to the mitigation of agricultural emissions abroad. This paper complements a partner paper (Hollis et al 2015) that discusses the science relating to agricultural greenhouse gases.
本文探讨了新西兰应该如何解决农业温室气体排放:甲烷和一氧化二氮。起点是国际社会商定的将全球变暖控制在2摄氏度以下的目标，以及新西兰承诺为国际减缓气候变化的努力贡献自己的“公平份额”。该报告侧重于减少农业生物排放在其中的作用，以及新西兰如何能够以最具成本效益的方式减少本国的排放，并为减少国外的农业排放作出贡献。本文补充了一篇讨论农业温室气体相关科学的合作论文(Hollis et al . 2015)。
{"title":"Agricultural Emissions Mitigation in New Zealand: Answers to Questions from the Parliamentary Commisioner for the Environment","authors":"Suzi Kerr","doi":"10.2139/SSRN.2854591","DOIUrl":"https://doi.org/10.2139/SSRN.2854591","url":null,"abstract":"This paper explores how New Zealand should address agricultural greenhouse gas emissions: methane and nitrous oxide. The starting point is the internationally agreed-upon goal of limiting global warming to below two degrees, and New Zealand’s commitment to contribute its ‘fair share’ to the international climate-change mitigation effort. The report focuses on the role of mitigating biological agricultural emissions within that, and how New Zealand could most cost-effectively mitigate its own emissions and contribute to the mitigation of agricultural emissions abroad. This paper complements a partner paper (Hollis et al 2015) that discusses the science relating to agricultural greenhouse gases.","PeriodicalId":365834,"journal":{"name":"Food Laws","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-10-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115330811","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper presents the unique experience of participation of Latin American stakeholders in the definition of European environmental standards, in the context of the EU Product Environmental Footprint (PEF) Program for coffee. The PEF Program is an ongoing process and the results will not be available until 2016-2017. The author’s focus is trade-related, and originates in a concern about the competitiveness of Latin American exports on the European market.Section I of this paper is an overall Introduction and deals succinctly with issues such as Trade, Climate Change and Environmental Standards. Section II, presents the European Union (EU) Single Market for Green Products initiative and the European Commission (EC) Product Environmental Footprint (PEF) Program; Section III, deals with the PEF Pilot Program for Coffee and Section IV, presents the participation in the PEF process by Latin American stakeholders, through the activities of the Latin American and Caribbean (LAC) Coffee Environmental Footprint Network, as well as some controversial issues raised during this process. Section V, draws some conclusions about this process.
{"title":"Environmental Standards and International Trade: Latin American Stakeholders and the EU Environmental Footprint Program","authors":"Alicia Frohmann","doi":"10.2139/SSRN.2712186","DOIUrl":"https://doi.org/10.2139/SSRN.2712186","url":null,"abstract":"This paper presents the unique experience of participation of Latin American stakeholders in the definition of European environmental standards, in the context of the EU Product Environmental Footprint (PEF) Program for coffee. The PEF Program is an ongoing process and the results will not be available until 2016-2017. The author’s focus is trade-related, and originates in a concern about the competitiveness of Latin American exports on the European market.Section I of this paper is an overall Introduction and deals succinctly with issues such as Trade, Climate Change and Environmental Standards. Section II, presents the European Union (EU) Single Market for Green Products initiative and the European Commission (EC) Product Environmental Footprint (PEF) Program; Section III, deals with the PEF Pilot Program for Coffee and Section IV, presents the participation in the PEF process by Latin American stakeholders, through the activities of the Latin American and Caribbean (LAC) Coffee Environmental Footprint Network, as well as some controversial issues raised during this process. Section V, draws some conclusions about this process.","PeriodicalId":365834,"journal":{"name":"Food Laws","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126543113","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
A concept of policy space is formulated under the domestic support rules of the WTO Agreement on Agriculture. This policy space is dyadic, comprising two kinds of space: exemption space and limited space. The two kinds are available differently for different countries. Exemption space derives from the entitlement to exempt policies that meet given criteria from those policies under which support counts against the country’s limit(s), i.e., exemption space allows limitless support. The criteria are those of Annex 2, Article 6.2 and Article 6.5 of the Agreement (green, development and blue boxes). Limited space derives from the entitlement to provide support under non-exempt policies up to the country’s limit(s). For most countries the limits are the de minimis levels calculated from the value of production of each product and of agriculture as whole, using the country’s de minimis percentage. For 32 countries (15 developed and 17 developing) the limit is the Bound Total Aggregate Measurement of Support (BTAMS) and the de minimis levels are thresholds above which support counts against the limit. Some acquisition of foodstuffs at administered prices is subject to special rules, now subject to negotiations with implications for both exemption space and limited space and the interaction between these two kinds of space. The Agreement’s criteria are reviewed to interpret the factors determining a country’s exemption space. In determining limited space, the centrality of a country’s values of production is illustrated by tracking limited space from 1995 to 2012 for the EU, the US, India and China under assumptions of perfect management of maximum support. China’s rapidly rising values of production have generated limited space that now greatly exceeds that of the EU. The US limited space has been rising but India’s limited space is growing faster and approaches the US level. In recent years these four countries have used only a small part of their limited space. As values of production rise in individual countries and in the world, the relative importance of BTAMS as a component of limited space declines since it stays fixed in nominal terms. The amount and the share of non-exempt support that can be accommodated within the de minimis provisions are thus increasing for individual countries and in total for the world. Some countries with declining values of production in agriculture are the exceptions, e.g., Japan. The different entitlement of different countries to limitless exemption space, in combination with limited space growing faster in some countries than in others, means that the picture of countries’ policy space for domestic support to agricultural producers is rapidly changing from the picture when the Doha negotiations started.
{"title":"Policy Space in Agriculture Under the WTO Rules on Domestic Support","authors":"L. Brink","doi":"10.2139/SSRN.2659406","DOIUrl":"https://doi.org/10.2139/SSRN.2659406","url":null,"abstract":"A concept of policy space is formulated under the domestic support rules of the WTO Agreement on Agriculture. This policy space is dyadic, comprising two kinds of space: exemption space and limited space. The two kinds are available differently for different countries. Exemption space derives from the entitlement to exempt policies that meet given criteria from those policies under which support counts against the country’s limit(s), i.e., exemption space allows limitless support. The criteria are those of Annex 2, Article 6.2 and Article 6.5 of the Agreement (green, development and blue boxes). Limited space derives from the entitlement to provide support under non-exempt policies up to the country’s limit(s). For most countries the limits are the de minimis levels calculated from the value of production of each product and of agriculture as whole, using the country’s de minimis percentage. For 32 countries (15 developed and 17 developing) the limit is the Bound Total Aggregate Measurement of Support (BTAMS) and the de minimis levels are thresholds above which support counts against the limit. Some acquisition of foodstuffs at administered prices is subject to special rules, now subject to negotiations with implications for both exemption space and limited space and the interaction between these two kinds of space. The Agreement’s criteria are reviewed to interpret the factors determining a country’s exemption space. In determining limited space, the centrality of a country’s values of production is illustrated by tracking limited space from 1995 to 2012 for the EU, the US, India and China under assumptions of perfect management of maximum support. China’s rapidly rising values of production have generated limited space that now greatly exceeds that of the EU. The US limited space has been rising but India’s limited space is growing faster and approaches the US level. In recent years these four countries have used only a small part of their limited space. As values of production rise in individual countries and in the world, the relative importance of BTAMS as a component of limited space declines since it stays fixed in nominal terms. The amount and the share of non-exempt support that can be accommodated within the de minimis provisions are thus increasing for individual countries and in total for the world. Some countries with declining values of production in agriculture are the exceptions, e.g., Japan. The different entitlement of different countries to limitless exemption space, in combination with limited space growing faster in some countries than in others, means that the picture of countries’ policy space for domestic support to agricultural producers is rapidly changing from the picture when the Doha negotiations started.","PeriodicalId":365834,"journal":{"name":"Food Laws","volume":"44 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-07-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122296525","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We develop an extended Nominal Rate of Assistance (NRA) methodology to disentangle the welfare impacts of policies for various interest groups along the value chain (to disaggregate effects within the “producer” and “consumer” umbrellas). We apply our value chain NRA methodology to the case of Pakistan’s price and trade policy. We analyse the welfare implications for various agents in the wheat-flour value chain from 2000 to 2013, a period characterized by major global price volatility and by regular adjustments of domestic policies. We find that the wheat price policy has generally benefitted flour consumers and wheat traders at the expense of wheat farmers and to a lesser extent flour millers. Our findings illustrate that the welfare implications of policies can be quite different within the “producer” and “consumer” umbrellas, which has potentially important implications for economic and political economy analyses and for the design of policies that aim to target the poorest groups along value chains.
{"title":"A Value Chain Approach to Measuring Distortions to Incentives and Food Policy Effects (with Application to Pakistan's Grain Policy)","authors":"Elena Briones Alonso, J. Swinnen","doi":"10.2139/ssrn.2595156","DOIUrl":"https://doi.org/10.2139/ssrn.2595156","url":null,"abstract":"We develop an extended Nominal Rate of Assistance (NRA) methodology to disentangle the welfare impacts of policies for various interest groups along the value chain (to disaggregate effects within the “producer” and “consumer” umbrellas). We apply our value chain NRA methodology to the case of Pakistan’s price and trade policy. We analyse the welfare implications for various agents in the wheat-flour value chain from 2000 to 2013, a period characterized by major global price volatility and by regular adjustments of domestic policies. We find that the wheat price policy has generally benefitted flour consumers and wheat traders at the expense of wheat farmers and to a lesser extent flour millers. Our findings illustrate that the welfare implications of policies can be quite different within the “producer” and “consumer” umbrellas, which has potentially important implications for economic and political economy analyses and for the design of policies that aim to target the poorest groups along value chains.","PeriodicalId":365834,"journal":{"name":"Food Laws","volume":"50 12","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132531005","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper analyzes the impact of USDA and IBGE crop forecast announcements in the Brazilian corn and soybean futures market. Futures prices were obtained from BM&FBOVESPA from 2009 to 2014 and announcements days were collected from IBGE and USDA historical reports. Expected value of absolute price changes (EABS) of four days before and four days after were calculated. Univariate and multivariate tests were performed to assess if the information on the reports affected prices. Results using EABS show that the high illiquidity of soybean March contract does not allow prices to reflect information and corn futures prices are influenced only by USDA announcements. Results also show that Brazilian market participant expectations tend to overestimate both USDA and IBGE forecasts. The conclusion of this work is that USDA announcements bring new information only for corn futures market and the lack of liquidity in the market might deteriorate the information transfer capacity of corn and soybean futures prices
{"title":"The Effects of IBGE and USDA Announcements on BM&FBOVESPA Soybean and Corn Futures Prices","authors":"M. S. Bego","doi":"10.2139/ssrn.2576780","DOIUrl":"https://doi.org/10.2139/ssrn.2576780","url":null,"abstract":"This paper analyzes the impact of USDA and IBGE crop forecast announcements in the Brazilian corn and soybean futures market. Futures prices were obtained from BM&FBOVESPA from 2009 to 2014 and announcements days were collected from IBGE and USDA historical reports. Expected value of absolute price changes (EABS) of four days before and four days after were calculated. Univariate and multivariate tests were performed to assess if the information on the reports affected prices. Results using EABS show that the high illiquidity of soybean March contract does not allow prices to reflect information and corn futures prices are influenced only by USDA announcements. Results also show that Brazilian market participant expectations tend to overestimate both USDA and IBGE forecasts. The conclusion of this work is that USDA announcements bring new information only for corn futures market and the lack of liquidity in the market might deteriorate the information transfer capacity of corn and soybean futures prices","PeriodicalId":365834,"journal":{"name":"Food Laws","volume":"108 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-03-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133525569","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Exogenous shocks to farmers’ consumption, production and labour market decisions are rarely considered accurately. For farm households, under labour market imperfections, such decisions are often interlinked. This calls for non-separable agricultural household models. According to this framework, second-order (or behavioural) effects include a direct (i.e., supply or demand reactions due to an exogenous shock) and an indirect (i.e., supply or demand adjustments to the endogenous variations in the shadow wage generated by the exogenous shock) component. Under large price changes or following structural interventions, such as those concerning land redistribution or mechanization practices, neglecting such second-order effects on consumption and production can bias the final impact on household welfare. The main objective of this study is thus to develop a robust and comprehensive tool to evaluate the effect on household welfare of different agricultural policies in Tanzania and food price changes. A two-stage estimation strategy is adopted: the shadow price of labour is first estimated and then used to estimate production and demand systems as well as labour market functions. These models are subsequently used to simulate the effect on household welfare of a hypothetical 40% increase in the price of cereals and other crops and a hypothetical 10% increase in the hectares of arable land and in the use of ox-ploughs. The results are finally compared with the case in which a separable model is adopted.
{"title":"Rural Policies, Price Change and Poverty in Tanzania: An Agricultural Household Model-Based Assessment","authors":"L. Tiberti, M. Tiberti","doi":"10.2139/ssrn.2137235","DOIUrl":"https://doi.org/10.2139/ssrn.2137235","url":null,"abstract":"Exogenous shocks to farmers’ consumption, production and labour market decisions are rarely considered accurately. For farm households, under labour market imperfections, such decisions are often interlinked. This calls for non-separable agricultural household models. According to this framework, second-order (or behavioural) effects include a direct (i.e., supply or demand reactions due to an exogenous shock) and an indirect (i.e., supply or demand adjustments to the endogenous variations in the shadow wage generated by the exogenous shock) component. Under large price changes or following structural interventions, such as those concerning land redistribution or mechanization practices, neglecting such second-order effects on consumption and production can bias the final impact on household welfare. The main objective of this study is thus to develop a robust and comprehensive tool to evaluate the effect on household welfare of different agricultural policies in Tanzania and food price changes. A two-stage estimation strategy is adopted: the shadow price of labour is first estimated and then used to estimate production and demand systems as well as labour market functions. These models are subsequently used to simulate the effect on household welfare of a hypothetical 40% increase in the price of cereals and other crops and a hypothetical 10% increase in the hectares of arable land and in the use of ox-ploughs. The results are finally compared with the case in which a separable model is adopted.","PeriodicalId":365834,"journal":{"name":"Food Laws","volume":"37 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116009757","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2014-09-01DOI: 10.5089/9781484392096.001
R. Anand, Ding Ding, V. Tulin
Indian food and fuel inflation has remained high for several years, and second-round effects on core inflation are estimated to be large. This paper estimates the size of second-round effects using an estimated reduced-form general equilibrium model of the Indian economy, which incorporates pass-through from headline inflation to core inflation. The results indicate that India's inflation is highly inertial and persistent. Due to second-round effects, the gap between headline inflation and core inflation decreases by about three fourths within one year as core inflation catches up with headline inflation. Large second-round effects stem from several factors, such as the high share of food in household expenditure and the role of food inflation in informing inflation expectations and wage setting. Analysis suggests that in order to durably reduce the current high inflation, the monetary policy stance needs to remain tight for a considerable length of time. In addition, progress on structural reforms to raise potential growth is critical to reduce the burden on monetary policy.
{"title":"Food Inflation in India: The Role for Monetary Policy","authors":"R. Anand, Ding Ding, V. Tulin","doi":"10.5089/9781484392096.001","DOIUrl":"https://doi.org/10.5089/9781484392096.001","url":null,"abstract":"Indian food and fuel inflation has remained high for several years, and second-round effects on core inflation are estimated to be large. This paper estimates the size of second-round effects using an estimated reduced-form general equilibrium model of the Indian economy, which incorporates pass-through from headline inflation to core inflation. The results indicate that India's inflation is highly inertial and persistent. Due to second-round effects, the gap between headline inflation and core inflation decreases by about three fourths within one year as core inflation catches up with headline inflation. Large second-round effects stem from several factors, such as the high share of food in household expenditure and the role of food inflation in informing inflation expectations and wage setting. Analysis suggests that in order to durably reduce the current high inflation, the monetary policy stance needs to remain tight for a considerable length of time. In addition, progress on structural reforms to raise potential growth is critical to reduce the burden on monetary policy.","PeriodicalId":365834,"journal":{"name":"Food Laws","volume":"87 10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127994424","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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