Monetary Policy and Food Inflation in Emerging and Developing Economies

This book explores the impact of monetary policy and food price volatility on inflation in emerging and developing economies. It focuses on inflation targeting in these economies, which are particularly vulnerable to food price shocks. The book provides a novel approach to modeling food inflation and discusses the policy responses to deviations in food prices. Strong evidence is presented that captures the deviations of food prices from their trend and the corresponding monetary policy effect in stabilizing such variabilities. The book will be of interest to students, scholars, and policymakers in agricultural economics, financial economics, food security, and sustainable development.

Format: Paperback / softback
Length: 120 pages
Publication date: 31 May 2023
Publisher: Taylor & Francis Ltd

This comprehensive book delves into the profound impact of monetary policy and food price volatility on emerging and developing economies. It sheds light on the challenges posed by the tendency of food price fluctuations to undermine the accuracy of inflation forecasting, leading to intricate dynamics in the overall inflation trajectory and potentially detrimental effects on economic welfare. While the theoretical potential of monetary policy to stabilize food prices has been extensively discussed in the literature, empirical evidence remains scarce, with studies often neglecting the volatile nature of food prices.

To address this gap, this book specifically focuses on inflation targeting in emerging economies, recognizing the significant role that food plays in their consumption baskets. By examining the experiences of countries such as Chile, Mexico, Turkey, Brazil, Hungary, Russia, Colombia, South Africa, Indonesia, and Ghana, the book offers valuable insights into the appropriate modeling of food inflation, the formulation of effective policy responses to deviations in both the short and medium to long term, and the management of market conditions characterized by excessive variability.

Strong evidence is presented throughout the book to illustrate the deviations of food prices from their trend and the corresponding monetary policy responses in stabilizing such fluctuations across different frequencies. The novel approach adopted in this book addresses the growing puzzles of asymmetry in the monetary policy effect on food prices during high, medium, and low episodes of food inflation. By providing a powerful tool for researchers seeking to understand the transmission mechanism, magnitudes involved, and the limitations of existing policy tools, this book empowers policymakers to navigate the complexities of managing food price volatility and ensuring economic stability.

As future studies continue to expand the evidence base and explore new avenues for understanding the dynamics between monetary policy, food price volatility, and inflation, this book will remain a valuable resource for scholars and policymakers alike. By deepening our understanding of these interrelated factors, we can work towards developing more effective strategies to promote sustainable economic growth and mitigate the negative consequences of food price shocks.

Weight: 453g
Dimension: 216 x 138 (mm)
ISBN-13: 9781032049694