The Transmission of Global Commodity Prices to Consumer Prices in a Commodity Import-Dependent Country: Evidence from Morocco

Mounir El-KARIMI and Ahmed El-Ghini
Authors registered in the RePEc Author Service: Ahmed El Ghini ()

Scientific Annals of Economics and Business (continues Analele Stiintifice), 2020, vol. 67, issue 1, 15 - 32

Abstract: This paper uses the Breitung and Candelon (2006) causality test to examine the effect of global oil and food price changes on the inflation in Morocco over the period from 1998Q1 to 2018Q1. The results show significant transmission from oil and food prices to domestic inflation. Specifically, the food prices are shown more important than oil prices in explaining inflation in the short-run, which reflects the high weight of food in the consumption basket. However, the effect of oil prices on inflation is much more persistent than the effect of food prices. Furthermore, the impact of commodity price shocks on inflation exhibits asymmetries. The oil price hikes affect more weakly the inflation than oil price decreases, whereas the food price increases are more transmitted to inflation than food price decreases. Our findings may provide useful information to researchers and policymakers in formulating more appropriate monetary policy. JEL Codes - C32; E31; Q02

Keywords: oil and food prices; inflation; Granger causality; frequency domain; Morocco (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:aic:saebjn:v:67:y:2020:i:1:p:15-32:n:8

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