The impact of macroeconomic factors on food price inflation: an evidence from India

Abstract

The present study investigates the impact of macroeconomic factors on food price inflation in India utilizing the monthly time series during January 2006–March 2019. The long-run relationship is confirmed among the variables using the ARDL bounds testing approach to cointegration. The coefficients of long-run estimates show that per capita income, money supply, global food prices, and agricultural wages are positively and significantly impacted food price inflation in both the short and long-run. While food grain availability has a negative and significant impact on food price inflation in both the short-run and long run. Further, the short-run estimates revealed that real exchange rate positively impacts food price inflation. However, the coefficient is insignificant in the short-run. The Granger causality estimates show that a short-run bidirectional causality is confirmed among per capita income, the exchange rate, per capita net availability of food grain and food price inflation. Further, there is evidence of unidirectional causality running from global food prices to food price inflation. However, there is no causal relationship running from money supply and agricultural wages to food price inflation in the short-run.

Republic of Estonia

“…Regressing the growth of domestic food prices on the lagged wage growth, global food price growth, and seasonal dummies yields a positive and highly significant coefficient on the lagged wage growth, both in the monthly and quarterly data samples (Table 5). This evidence is consistent with the literature findings in other countries, including India and the US, where wages or general income growth are associated with higher food price inflation (see Lee et al (2000)) and Samal et al (2022)).…”

Unraveling the Major Determinants behind Price Changes in Four Selected Representative Agricultural Products

“…Although many studies affirm the significant role of exchange rates in driving inflation [53][54][55], there is no consensus about the impact of money supply on food inflation. While some studies assert its positive correlation with food inflation [56,57], others contest this assertion [58]. Additionally, the impact of crude oil price on production costs contributes to a decline in agricultural supply, and this is seen as another additive effect on prices [59][60][61].…”

Geographical patterns of implementing a government subsidy program: implications for health outcomes and nutrient intake in Iran

“…Presently, the selection of food choices that impact balanced nutrition is predominantly influenced by factors such as price, convenience, taste, and health considerations (8). The impact of high food price inflation extends beyond macroeconomic stability and also affects small farmers and impoverished consumers in developing countries, where a significant portion of their income is allocated to food consumption (9). Food prices, especially those of fruits, vegetables, and proteins, strongly influence what is purchased and consumed, particularly among the poor (10).…”