The Causal Linkage between Energy Price and Food Price

Dervis Kirikkaleli and Ibrahim Darbaz
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Ibrahim Darbaz: Department of Business Administration, Faculty of Economic and Administrative Sciences, European University of Lefke, Lefke 99780, Turkey

Energies, 2021, vol. 14, issue 14, 1-13

Abstract: This paper aims to reveal the causal relationship between energy prices and food prices and whether this relationship is similar in the food sub-groups forming the food price index used. As food prices more than doubled during the 2008 economic crisis, this relationship has received considerable attention from researchers. Many researches have been conducted to determine the causes and consequences of the 2008 food price crisis. Researches are mainly focused on crude oil and bio-energy in terms of “energy”. This research is not only differentiated by the data used but also by the methodology employed. The study attempts to add new findings to the empirical food price literature by utilizing relatively newly developed methods, namely Toda–Yamamoto causality, Fourier Toda–Yamamoto causality, and spectral BC causality tests. The spectral BC causality test clearly reveals that there is bidirectional causality between the energy price index and food price indexes (grains, other food, and oils) at different frequencies.

Keywords: energy price; food price; food security; frequency domain causality; time domain causality (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jeners:v:14:y:2021:i:14:p:4182-:d:592170

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