| Description |
1 online resource (75 pages) |
| Series |
IMF Working Papers |
|
IMF Working Papers
|
| Contents |
Cover Page; Title Page; Copyright Page; Contents; 1. Introduction; 1. World WPI and World Relative Food Prices (in deviations from HP-trend); 1. Correlation between World Inflation Indicators and Food and Oil Prices; 2. Causality Tests; 3. Food Expenditure Shares; 2. Model; 2. Effects of Food Price Shocks on Natural Output and the Terms of Trade; 3. Impulse-Responses; 4. Calibration of Parameters; 3. Impulse Responses of one unit world food's relative price shock with sigma = 2 and eta= [0.25, 0.5, 0.5, 2] and gamma = 1 with PPI rule |
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4. Impulse Responses of one unit world food's relative price shock with sigma = 2 and eta = [0.25, 0.5, 0.5, 2] and gamma = 5 with PPI rule5. Impulse Responses of one unit world food's relative price shock with sigma = 2 and eta = [0.25, 0.5, 0.5, 2] and gamma = 1 with CPI rule; 6. Impulse Responses of one unit world food's relative price shock with sigma = 2 and eta = [0.25, 0.5, 0.5, 2] and gamma = 5 with CPI rule; 4. Welfare; 5. Policy Comparisons; 5. Calibration of Parameters in Welfare Comparisons of Policy Rules; 6. Welfare Comparisons with Baseline Calibration |
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7. Welfare Comparisons with Low Variance of Food Prices8. Model statistics Under Simulated Random Shocks; 9. Welfare Comparisons with Higher Variance of Monetary Shocks; 10. Welfare Comparisons with Higher Persistence of Monetary Shocks; 11. Welfare Comparisons with Lower Variance of Productivity Shocks; 12. Welfare Comparisons with Higher Persistence of Productivity Shocks; 13. Welfare Comparisons with "Hawkish" Taylor Rule; 14. Welfare Comparisons with "Dovish" Taylor Rule; 15. Welfare Comparisons with Taylor Rule with Moderate Reaction to Output Gap |
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16. Welfare Comparisons with High Export Price Elasticity17. Welfare Comparisons with Lower Elasticity of Labor Supply; 18. Welfare Comparisons with World Inflation Variability; 19. Welfare Comparisons with Higher Food Import Share; 20. Welfare Comparisons with Lower Food Import Share; 6. Conclusion; Appendix 1: Recursive Representation of the Model; Appendix 2: Relationship between Home Pricing and Co-variance of Income and Price Shocks; References; Footnotes |
| Summary |
The large swings in world food prices in recent years renew interest in the question of how monetary policy in small open economies should react to such imported price shocks. We examine this issue in a canonical open economy setting with sticky prices and where food plays a distinctive role in utility. We show how world food price shocks affect natural output and other aggregates, and derive a second order approximation to welfare. Numerical calibrations show broad CPI targeting to be welfare-superior to alternative policy rules once the variance of food price shocks is sufficiently large as |
| Bibliography |
Includes bibliographical references |
| Notes |
English |
|
Print version record |
| Subject |
Food prices -- Government policy
|
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Monetary policy.
|
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Food prices -- Government policy
|
|
Monetary policy
|
| Form |
Electronic book
|
| Author |
Catão, Luis
|
| ISBN |
1462392067 |
|
9781462392063 |
|
1455252573 |
|
9781455252572 |
|
1282846337 |
|
9781282846333 |
|
9786612846335 |
|
661284633X |
|
1455201448 |
|
9781455201440 |
|
