Are International Food Price Spikes the Source of Egypt’s High Inflation?
Sherine Al-Shawarby () and
Hoda Selim ()
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Sherine Al-Shawarby: Cairo University and World Bank
Hoda Selim: Economic Research Forum
Chapter Chapter 4 in Financial Integration, 2013, pp 61-83 from Springer
Abstract:
Abstract This paper examines whether domestic inflation spikes in Egypt during 2001–2011 were primarily the result of external food price shocks. To estimate the pass-through of international food price inflation to domestic price inflation, two different methodologies are used: a two-step regression model estimates the pass-through in the long run, and a VAR model provides the short-run estimates. The empirical evidence confirms that pass-through is high in the short term, but not in the long run. More precisely, our results show that (1) Long-run pass-through to domestic food inflation is relatively low, lying between 13 % and 16 %, while the long-term spill-over from domestic food inflation to core inflation is moderate, lying around 60 %; (2) In the short-term, pass-through is relatively high, estimated around 29 % after 6 months and around two-thirds after a year, but the spill-over effect to core inflation is limited; (3) international food price shocks explain only a small portion of domestic inflation shocks in both the short and long terms; and (4) international price inflation has asymmetric effects on domestic prices.
Keywords: Inflation; Food commodity prices; Pass-through; Egypt (search for similar items in EconPapers)
Date: 2013
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Related works:
Working Paper: Are International Food Price Spikes the Source of Egypt’s High Inflation? (2012) 
Working Paper: Are international food price spikes the source of Egypt's high inflation ? (2012) 
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Persistent link: https://EconPapers.repec.org/RePEc:spr:fimchp:978-3-642-35697-1_4
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DOI: 10.1007/978-3-642-35697-1_4
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