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Does Monetary Policy Stabilise Food Inflation in Hungary?

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  • Fertő, Imre
  • Bareith, Tibor

Abstract

This study examines the relationship between monetary policy and food price inflation in Hungary from January 2007 to December 2023 using the Nonlinear Autoregressive Distributed Lag (NARDL) model. Our analysis reveals that although the short-term impact of monetary policy on food prices is minimal, there is a notable long-term effect where implementing tighter monetary measures increases food price inflation over time. Policymakers must take a nuanced approach when dealing with food price shocks, considering both monetary and fiscal interventions. Our research highlights the significance of combining monetary policy actions with specific fiscal strategies and structural changes in the agriculture to reduce the negative effects of food inflation and protect the well-being of vulnarable populations.

Suggested Citation

  • Fertő, Imre & Bareith, Tibor, 2024. "Does Monetary Policy Stabilise Food Inflation in Hungary?," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 16(4), December.
    • Handle: RePEc:ags:aolpei:348998
    DOI: 10.22004/ag.econ.348998
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