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International Commodity Prices Transmission to Consumer Prices in Africa

Author

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  • Thibault Lemaire

    (UP1 UFR02 - Université Paris 1 Panthéon-Sorbonne - École d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Paul Vertier

    (Banque de France - Banque de France - Banque de France)

Abstract

Global commodity prices spikes can have strong macroeconomic effects, particularly in developing countries. This paper estimates the global commodity prices pass-through to consumer price inflation in Africa. Our sample includes monthly data for 48 countries over the period 2002m02-2021m04. We consider 17 commodity prices separately to take into account both the heterogeneity in price variations and the cross-correlations between them, and to depart from aggregate indices that use weights unrepresentative of consumption in African countries. Using local projections in a panel dataset, we find a maximum passthrough of 24%, and a long-run pass-through of about 20%, higher than usually found in the literature. We also consider country-specific regressions to test whether estimated pass-through are related to countries' observable characteristics.

Suggested Citation

  • Thibault Lemaire & Paul Vertier, 2023. "International Commodity Prices Transmission to Consumer Prices in Africa," Working Papers hal-03944888, HAL.
    • Handle: RePEc:hal:wpaper:hal-03944888
    Note: View the original document on HAL open archive server: https://hal.science/hal-03944888
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    References listed on IDEAS

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    More about this item

    Keywords

    Commodity prices; food prices; energy prices; inflation; pass-through; Africa;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F44 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Business Cycles
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market

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