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The Interaction Between Food Prices And The Future Expectation Of Inflation: A Dynamic Analysis

Author

Listed:
  • Sara Rosa dos Santos

    (Universidade Federal de Rondonópolis (UFR))

  • Aniela Fagundes Carrara

    (Universidade Federal de Mato Grosso (UFMT))

Abstract

The present study aimed to analyze the relationship between food prices and expectations about the IPCA itself, to understand whether such prices can generate some relevant and lasting impact, in addition to seasonal ones arising from its agricultural nature, in the expectation of inflation. To fulfill the proposed objective, a model based on the Phillips curve was structured, whose estimation was performed using Autoregressive Vectors with Error Correction in its structural version (SVEC). The results obtained show that there is a considerable relationship between food prices and the expectation of inflation, and such influence is shown to be lasting, therefore, the variability of such prices, however transient they may end up generating a reflection of greater durability. in what is expected from inflation and so, such effects can be transmitted indirectly to the economy, since expectations are an important item within the Brazilian macroeconomic scenario.

Suggested Citation

  • Sara Rosa dos Santos & Aniela Fagundes Carrara, 2021. "The Interaction Between Food Prices And The Future Expectation Of Inflation: A Dynamic Analysis," Revista de Economia Mackenzie (REM), Mackenzie Presbyterian University, Social and Applied Sciences Center, vol. 18(2), pages 135-158, July-Dece.
    • Handle: RePEc:aft:journl:v:18:2:2021:jul:dec:p:135-158
    DOI: -
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    More about this item

    Keywords

    Prices; Expectations; Food. Transmission; IPCA.;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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