Oil Price Shochs'S Asymmetric Responses on Food Inflation in Middle East and North Africa Countries in the time of Ukraine-Russia Crisis

Abstract

The war between Russia and Ukraine began on February 24, 2022, and it has lasted for more than a year. The world economy has been negatively influenced by the war and the series of events that followed it in a number of ways, including the stock market, and trade. The energy market and food prices have seen a significant decline. This empirical study examined the unequal effects of oil price shocks on food inflation in MENA countries during the Russian aggression using a Panel Asymmetric Granger Causality Test and a Non-linear Panel Autoregressive Distributed Lag Model. Empirical evidence demonstrated the asymmetry between the inflation of food and oil, with the majority of the effects of oil price shocks being positive on food inflation. The empirical data supporting the short- and long-term asymmetries in food and oil prices was revealed, with the majority of the evidence pointing to the beneficial impacts of oil price shocks on food inflation. Additionally, the estimations indicated that the food prices rose in both eras (after the war between Russia and Ukraine and when the complete sample was chosen) in response to increases in the price of oil.