IDEAS home Printed from https://ideas.repec.org/a/ags/agreko/346823.html
   My bibliography  Save this article

Reconsidering the role of food prices in South African headline inflation

Author

Listed:
  • Rangasamy, L.
  • Nel, E.

Abstract

The conventional wisdom is that food price shocks are temporary and hence do not usually warrant specific attention in policy formulation. However, more recently, empirical evidence has shown that food price shocks are persistent and have a strong bearing on inflation outcomes. This paper shows that this is indeed the case for South Africa. South African food prices are volatile and the price shocks are persistent. Food inflation is an important determinant of underlying inflationary pressures in the South African economy. Thus, policy should give particular attention to food price movements if inflation is to be kept in check.

Suggested Citation

  • Rangasamy, L. & Nel, E., 2015. "Reconsidering the role of food prices in South African headline inflation," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 53(4), March.
    • Handle: RePEc:ags:agreko:346823
    DOI: 10.22004/ag.econ.346823
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/346823/files/Reconsidering%20the%20role%20of%20food%20prices%20in%20South%20African%20headline%20inflation.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.346823?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Mr. James P Walsh, 2011. "Reconsidering the Role of Food Prices in Inflation," IMF Working Papers 2011/071, International Monetary Fund.
    2. Zelda Blignaut & Greg Farrell & Victor Munyama & Logan Rangasamy, 2009. "A Note On The Trimmed Mean Measure Of Core Inflation In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 77(4), pages 538-552, December.
    3. Lombardi, Marco J. & Galesi, Alessandro, 2009. "External shocks and international inflation linkages: a global VAR analysis," Working Paper Series 1062, European Central Bank.
    4. Bilke, Laurent & Stracca, Livio, 2007. "A persistence-weighted measure of core inflation in the Euro area," Economic Modelling, Elsevier, vol. 24(6), pages 1032-1047, November.
    5. Rahul Anand & Eswar S. Prasad, 2010. "Optimal Price Indices for Targeting Inflation Under Incomplete Markets," NBER Working Papers 16290, National Bureau of Economic Research, Inc.
    6. Catão, Luis A.V. & Chang, Roberto, 2015. "World food prices and monetary policy," Journal of Monetary Economics, Elsevier, vol. 75(C), pages 69-88.
    7. Luca Gattini & Huw Pill & Ludger Schuknecht, 2015. "A global perspective on inflation and propagation channels," Journal of Banking and Financial Economics, University of Warsaw, Faculty of Management, vol. 1(3), pages 50-76, May.
    8. Michael Pedersen, 2011. "Propagation of Shocks to Food and Energy Prices: an International Comparison," Working Papers Central Bank of Chile 648, Central Bank of Chile.
    9. Toda, Hiro Y. & Yamamoto, Taku, 1995. "Statistical inference in vector autoregressions with possibly integrated processes," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 225-250.
    10. Logan Rangasamy, 2011. "Food Inflation In South Africa: Some Implications For Economic Policy," South African Journal of Economics, Economic Society of South Africa, vol. 79(2), pages 184-201, June.
    11. Logan Rangasamy, 2009. "Inflation Persistence And Core Inflation: The Case Of South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 77(3), pages 430-444, September.
    12. Wodon, Quentin & Zaman, Hassan, 2008. "Rising food prices in Sub-Saharan Africa : poverty impact and policy responses," Policy Research Working Paper Series 4738, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:ags:ijag24:346823 is not listed on IDEAS
    2. Franz Ruch & Stan du Plessis, 2015. "SecondRound Effects from Food and Energy Prices an SBVAR approach," Working Papers 7008, South African Reserve Bank.
    3. Iddrisu, Abdul-Aziz & Alagidede, Imhotep Paul, 2020. "Monetary policy and food inflation in South Africa: A quantile regression analysis," Food Policy, Elsevier, vol. 91(C).
    4. Abdul-Aziz Iddrisu & Imhotep Paul Alagidede, 2021. "Asymmetry in food price responses to monetary policy: a quantile regression approach," SN Business & Economics, Springer, vol. 1(3), pages 1-25, March.
    5. José de Gregorio, 2012. "Commodity Prices, Monetary Policy and Inflation," Working Papers wp359, University of Chile, Department of Economics.
    6. Stan Plessis & Gideon Rand & Kevin Kotzé, 2015. "Measuring Core Inflation in South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 83(4), pages 527-548, December.
    7. Stan du Plessis, 2014. "Targeting core inflation in emerging market economies," Working Papers 23/2014, Stellenbosch University, Department of Economics.
    8. Siami-Namini, Sima & Hudson, Darren & Trindade, A. Alexandre & Lyford, Conrad, 2018. "Commodity Prices, Monetary Policy and the Taylor Rule," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266719, Southern Agricultural Economics Association.
    9. Gilles Dufrénot & William Ginn & Marc Pourroy, 2023. "ENSO Climate Patterns on Global Economic Conditions," AMSE Working Papers 2308, Aix-Marseille School of Economics, France.
    10. Joao Ribeiro, 2019. "Inflación de alimentos en Perú: El rol de la política monetaria," Revista de Analisis Economico – Economic Analysis Review, Universidad Alberto Hurtado/School of Economics and Business, vol. 34(2), pages 81-98, October.
    11. Eric Kateta Tshiakambila & Joseph Chisasa, 2017. "Food Inflation and Passenger Vehicle Purchases in South Africa: Cointegration, Short Run Dynamics and Causality," Journal of Economics and Behavioral Studies, AMH International, vol. 9(5), pages 122-134.
    12. Anand, Rahul & Prasad, Eswar S. & Zhang, Boyang, 2015. "What measure of inflation should a developing country central bank target?," Journal of Monetary Economics, Elsevier, vol. 74(C), pages 102-116.
    13. Mr. Emre Alper & Mr. Niko A Hobdari & Ali Uppal, 2016. "Food Inflation in Sub-Saharan Africa: Causes and Policy Implications," IMF Working Papers 2016/247, International Monetary Fund.
    14. Misati, Roseline Nyakerario & Munene, Olive, 2015. "Second Round Effects And Pass-Through Of Food Prices To Inflation In Kenya," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 3(3), pages 1-13, July.
    15. Aye, Goodness C., 2016. "Causality between Oil Price and South Africa's Food Price: Time Varying Approach - Relazione di causalità tra prezzo del petrolio e pr ezzo dei prodotti alimentari in Sud Africa: un approccio time var," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 69(3), pages 193-212.
    16. Mija, Simion & Slobozian, Dorin & Cuhal, Radu & Stratan, Alexandru, 2013. "How Core Inflation Reacts to the Second Round Effects," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 98-118, March.
    17. Nguyen, Anh D.M. & Dridi, Jemma & Unsal, Filiz D. & Williams, Oral H., 2017. "On the drivers of inflation in Sub-Saharan Africa," International Economics, Elsevier, vol. 151(C), pages 71-84.
    18. Andrew Filardo & Marco Jacopo Lombardi, 2014. "Has Asian emerging market monetary policy been too procyclical when responding to swings in commodity prices?," BIS Papers chapters, in: Bank for International Settlements (ed.), Globalisation, inflation and monetary policy in Asia and the Pacific, volume 77, pages 129-153, Bank for International Settlements.
    19. Ginn, William & Pourroy, Marc, 2020. "Should a central bank react to food inflation? Evidence from an estimated model for Chile," Economic Modelling, Elsevier, vol. 90(C), pages 221-234.
    20. Mr. James P Walsh, 2011. "Reconsidering the Role of Food Prices in Inflation," IMF Working Papers 2011/071, International Monetary Fund.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:agreko:346823. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aeasaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.