Work

International Food Commodity Prices and Missing (Dis)Inflation in the Euro Area

Year: 2020

Type: article

Abstract: Exogenous shifts in international food commodity prices, which are identified using an SVAR model with global harvest shocks as an external instrument, explain almost 30% of euro-area inflation volatility over the medium term and contributed significantly to the twin puzzle of missing (dis)inflation in the era after the Great Recession. International food price shocks have an impact on food retail prices through the food production chain, but also trigger indirect inflationary effects via a depreciation of the euro and, most important, rising wages. Finally, due to asymmetric wage responses, the inflationary effects are very different across member states.

Source: The Review of Economics and Statistics

DOI: 10.1162/rest_a_00939

Author: Gert Peersman

Institution: Ghent University

Language: English

Topic: Market Dynamics and Volatility

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Zero hunger

Open Access status: bronze

OpenAlex ID: W3123068258