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Determinants of Producer Price versus Consumer price inflation in emerging Asia

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  • Juthathip Jongwanich
  • Donghyun Park
  • Petchtharin Wongcharoen

Abstract

This paper examines and compares the determinants of producer and consumer price inflation in ten Asian countries during 2000–2015. In this connection, we also investigate the pass-through of global oil prices, global food prices and exchange rates to domestic producer and consumer prices. The model applied here is based on the dynamic interrelationship between the price variables in the distribution chain. Our results show that external cost-push factors such as oil and food prices are more important in explaining producer price inflation than consumer one. For consumer prices, demand-pull factors still explain much of the variation in inflation. The pass-through of oil (food) prices tends to be higher in oil (food) exporting countries than in oil (food) importing countries. Government policy measures played a role in reducing or delaying the pass-through of oil and food prices to domestic prices. Lastly, exchange rate pass-through tends to be higher in countries with more flexible exchange rates.

Suggested Citation

  • Juthathip Jongwanich & Donghyun Park & Petchtharin Wongcharoen, 2019. "Determinants of Producer Price versus Consumer price inflation in emerging Asia," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 24(2), pages 224-251, April.
    • Handle: RePEc:taf:rjapxx:v:24:y:2019:i:2:p:224-251
    DOI: 10.1080/13547860.2019.1574251
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    Cited by:

    1. Sy-Hoa Ho & Idir Hafrad & Viet Dung Tran, 2022. "Asymmetric exchange rates pass-through in Vietnam," Economics Bulletin, AccessEcon, vol. 42(3), pages 1657-1672.

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