Sangam: A Confluence of Knowledge Streams

Inflation Dynamics and Food Prices in an Agricultural Economy : The Case of Ethiopia

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dc.creator Loening, Josef L.
dc.creator Durevall, Dick
dc.creator Birru, Yohannes A.
dc.date 2012-03-19T19:11:03Z
dc.date 2012-03-19T19:11:03Z
dc.date 2009-06-01
dc.date.accessioned 2023-02-17T21:10:22Z
dc.date.available 2023-02-17T21:10:22Z
dc.identifier http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20090618133717
dc.identifier http://hdl.handle.net/10986/4163
dc.identifier.uri http://localhost:8080/xmlui/handle/CUHPOERS/245200
dc.description Ethiopia has experienced a historically unprecedented increase in inflation, mainly driven by cereal price inflation, which is among the highest in Sub-Saharan Africa. Using monthly data from the past decade, the authors estimate error correction models to identify the relative importance of several factors contributing to overall inflation and its three major components, cereal prices, food prices, and non-food prices. The main finding is that, in a longer perspective, over three to four years, the main factors that determine domestic food and non-food prices are the exchange rate and international food and goods prices. In the short run, agricultural supply shocks and inflation inertia strongly affect domestic inflation, causing large deviations from long-run price trends. Money supply growth does affect food price inflation in the short run, although the money stock itself does not seem to drive inflation. The results suggest the need for a multi-pronged approach to fight inflation. Forecast scenarios suggest monetary and exchange rate policies need to take into account cereal production, which is among the key determinants of inflation, assuming a decline in global commodity prices. Implementation of successful policies will be contingent on the availability of foreign exchange and the performance of agriculture.
dc.language English
dc.relation Policy Research working paper ; no. WPS 4969
dc.rights CC BY 3.0 IGO
dc.rights http://creativecommons.org/licenses/by/3.0/igo/
dc.rights World Bank
dc.subject ADVERSE EFFECTS
dc.subject AGGREGATE DEMAND
dc.subject AGRICULTURAL OUTPUT
dc.subject AGRICULTURAL PRICES
dc.subject AGRICULTURE
dc.subject ANNUAL GROWTH
dc.subject ARBITRAGE
dc.subject ASSETS
dc.subject BALANCE OF PAYMENTS
dc.subject BANKING SYSTEM
dc.subject BARTER
dc.subject BLACK MARKET
dc.subject BLACK MARKET EXCHANGE RATE
dc.subject BUSINESS CYCLES
dc.subject CAPITAL ACCOUNT
dc.subject CAPITAL FLOWS
dc.subject CAPITAL GOODS
dc.subject CAPITAL INFLOWS
dc.subject CAPITAL MARKETS
dc.subject CENTRAL BANK
dc.subject CEREAL PRICE
dc.subject CEREAL PRICES
dc.subject CHOW TESTS
dc.subject CLOSED ECONOMY
dc.subject COFFEE PRICES
dc.subject COMMERCIAL BANK
dc.subject COMMERCIAL BANKS
dc.subject COMMERCIALIZATION
dc.subject COMMODITY MARKETS
dc.subject COMMODITY PRICE
dc.subject COMMODITY PRICES
dc.subject COMPETITIVENESS
dc.subject CONSUMER BASKET
dc.subject CONSUMER PRICE
dc.subject CONSUMER PRICE INDEX
dc.subject CONSUMER PRICES
dc.subject CONSUMPTION EXPENDITURE
dc.subject CORRELATION COEFFICIENT
dc.subject CURRENCY DEPRECIATION
dc.subject CURRENCY SUBSTITUTION
dc.subject DEFLATION
dc.subject DEMAND ANALYSIS
dc.subject DEMAND FUNCTION
dc.subject DEPOSIT
dc.subject DEPOSITS
dc.subject DEPRECIATION
dc.subject DEVALUATIONS
dc.subject DISCOUNT RATES
dc.subject DISEQUILIBRIUM
dc.subject DOLLAR EXCHANGE RATE
dc.subject DOMESTIC CURRENCY
dc.subject DOMESTIC DEMAND
dc.subject DOMESTIC GOODS
dc.subject DOMESTIC INFLATION
dc.subject DOMESTIC INVESTORS
dc.subject DOMESTIC MARKET
dc.subject DOMESTIC PRICE
dc.subject DOMESTIC PRICE LEVEL
dc.subject DOMESTIC PRICES
dc.subject DUMMY VARIABLE
dc.subject DUMMY VARIABLES
dc.subject DURABLE GOODS
dc.subject ECONOMETRIC MODEL
dc.subject ECONOMIC GROWTH
dc.subject ENDOGENOUS VARIABLE
dc.subject ENERGY PRICE
dc.subject ENERGY PRICES
dc.subject EQUILIBRIUM LEVEL
dc.subject EQUILIBRIUM PRICES
dc.subject ERROR CORRECTION MODELS
dc.subject ERROR CORRECTION TERM
dc.subject ERROR CORRECTION TERMS
dc.subject EURO EXCHANGE RATE
dc.subject EXCESS DEMAND
dc.subject EXCESS LIQUIDITY
dc.subject EXCESS SUPPLY
dc.subject EXCHANGE RATE
dc.subject EXCHANGE RATE CHANNEL
dc.subject EXCHANGE RATE POLICIES
dc.subject EXCHANGE RATE POLICY
dc.subject EXOGENOUS SHOCK
dc.subject EXPENDITURE
dc.subject EXPLANATORY VARIABLE
dc.subject EXPLANATORY VARIABLES
dc.subject EXPORT COMPETITIVENESS
dc.subject EXTERNAL FACTORS
dc.subject EXTERNAL MARKETS
dc.subject FACE VALUE
dc.subject FINANCIAL MARKETS
dc.subject FISCAL POLICIES
dc.subject FIXED EXCHANGE RATE
dc.subject FIXED RATE
dc.subject FLOATING EXCHANGE RATE
dc.subject FOOD PRICE
dc.subject FOOD PRICES
dc.subject FOREIGN CURRENCY
dc.subject FOREIGN EXCHANGE
dc.subject FOREIGN EXCHANGE MARKET
dc.subject FOREIGN EXCHANGE RATE
dc.subject FOREIGN EXCHANGE RESERVES
dc.subject FOREIGN RESERVES
dc.subject FUTURE INFLATION
dc.subject GDP
dc.subject GROWTH RATE
dc.subject GROWTH RATES
dc.subject HIGH INFLATION
dc.subject IMBALANCES
dc.subject IMPORT
dc.subject IMPORT PRICE
dc.subject IMPORTS
dc.subject INCOME
dc.subject INDEXATION
dc.subject INFLATION
dc.subject INFLATION DYNAMICS
dc.subject INFLATION EXPECTATIONS
dc.subject INFLATIONARY EXPECTATIONS
dc.subject INTEREST RATE
dc.subject INTEREST RATES
dc.subject INTERMEDIATE GOODS
dc.subject INTERMEDIATE PRODUCTS
dc.subject INTERNATIONAL CAPITAL MARKETS
dc.subject INTERNATIONAL MARKET
dc.subject INTERNATIONAL PRICES
dc.subject INTERNATIONAL TRADE
dc.subject INVESTMENT OPPORTUNITIES
dc.subject LOCAL CURRENCY
dc.subject LONG-RUN EQUILIBRIUM
dc.subject LOW INTEREST RATES
dc.subject LOW-INCOME COUNTRIES
dc.subject MACROECONOMIC PERFORMANCE
dc.subject MACROECONOMIC POLICY
dc.subject MARKET CONDITIONS
dc.subject MARKET DISTORTIONS
dc.subject MARKET EQUILIBRIUM
dc.subject MARKET INTEGRATION
dc.subject MARKET PRICES
dc.subject MARKET SHARE
dc.subject MARKET STRUCTURE
dc.subject MARKETING
dc.subject MICROECONOMIC ANALYSIS
dc.subject MONETARY POLICIES
dc.subject MONETARY POLICY
dc.subject MONETARY TRANSMISSION
dc.subject MONEY DEMAND
dc.subject MONEY DEMAND FUNCTION
dc.subject MONEY HOLDINGS
dc.subject MONEY MARKET
dc.subject MONEY MARKETS
dc.subject MONEY STOCK
dc.subject MONEY SUPPLY
dc.subject NATIONAL BANK
dc.subject NOMINAL EXCHANGE RATE
dc.subject OIL PRICE
dc.subject OIL PRICE INFLATION
dc.subject OPEN ECONOMY
dc.subject OUTPUT GAP
dc.subject PARALLEL EXCHANGE RATE
dc.subject PARALLEL MARKET
dc.subject PARALLEL MARKET RATE
dc.subject PHILLIPS CURVE
dc.subject POVERTY REDUCTION
dc.subject PRICE ADJUSTMENTS
dc.subject PRICE CHANGES
dc.subject PRICE DYNAMICS
dc.subject PRICE FLEXIBILITY
dc.subject PRICE FLUCTUATIONS
dc.subject PRICE HIKE
dc.subject PRICE INCREASE
dc.subject PRICE INCREASES
dc.subject PRICE INDEXES
dc.subject PRICE INDICES
dc.subject PRICE INFLATION
dc.subject PRICE LEVEL
dc.subject PRICE LEVELS
dc.subject PRICE SETTING
dc.subject PRICE TRENDS
dc.subject PRODUCER PRICES
dc.subject PUBLIC INVESTMENTS
dc.subject RANDOM WALK
dc.subject RAPID GROWTH
dc.subject RAPID INFLATION
dc.subject RATE OF INFLATION
dc.subject REAL EFFECTIVE EXCHANGE RATE
dc.subject REAL EXCHANGE RATE
dc.subject REAL IMPORTS
dc.subject REAL INTEREST RATE
dc.subject REGIONAL MARKETS
dc.subject RELATIVE PRICE
dc.subject RELATIVE PRICES
dc.subject ROBUSTNESS CHECK
dc.subject STABLE EXCHANGE RATE
dc.subject STRUCTURAL REFORMS
dc.subject SUBSTITUTION
dc.subject SUPPLY SHOCKS
dc.subject SUPPLY-SIDE
dc.subject T-VALUE
dc.subject TIGHT MONETARY POLICY
dc.subject TOTAL EXPORTS
dc.subject TRADABLE GOODS
dc.subject TRADE DEFICITS
dc.subject TRADE PATTERN
dc.subject TRADING PARTNER
dc.subject TRADING PARTNERS
dc.subject TRANSMISSION MECHANISM
dc.subject TRANSMISSION MECHANISMS
dc.subject TRANSPORTATION COSTS
dc.subject TREASURY BILL
dc.subject TREASURY BILLS
dc.subject UNCERTAINTIES
dc.subject UNCERTAINTY
dc.subject UNEMPLOYMENT
dc.subject VOLATILITY
dc.subject WEIGHTS
dc.subject WHOLESALE PRICES
dc.subject WHOLESALERS
dc.subject WORLD MARKET
dc.subject WORLD MARKETS
dc.subject WORLD PRICES
dc.title Inflation Dynamics and Food Prices in an Agricultural Economy : The Case of Ethiopia
dc.type Publications & Research :: Policy Research Working Paper
dc.coverage Africa
dc.coverage Africa
dc.coverage Sub-Saharan Africa
dc.coverage East Africa
dc.coverage Ethiopia


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