Three bubbles and a panic: An explanatory review of recent food commodity price events

Piesse, Jenifer; Thirtle, Colin

doi:10.1016/j.foodpol.2009.01.001

“…Firstly, with the dramatic rise in the price of stable food commodities over the past decade 2 , while the literature on the causes and impacts of the crisis in global food prices in the developing world has mushroomed in recent years (Piesse & Thirtle, 2009;Wodon & Zaman, 2010;Masters & Shively, 2008), we are unaware of studies that have closely examined how financial policies affected consumer prices. Hence, correcting inflation is particularly important in fighting poverty (Funjii, 2011) on the one hand and; on the other hand directly (Ibeh et al, 2007;Acquaah et al, 2008;Musila & Al-Zyoud, 2012) or indirectly (Asongu 2012(Asongu , 2013aBartels et al, 2009;Rolfe & Woodward, 2004;Tuomi, 2011) eases the doing of business in Africa.…”

Section: Introductionmentioning

confidence: 99%

Correcting Inflation with Financial Dynamic Fundamentals: Which Adjustments Matter in Africa?

Asongu

¹

2014

Journal of African Business

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may April 2013 AbstractThis paper assesses the adjustment of inflation with financial dynamic fundamentals of money (financial depth), credit (financial activity) and efficiency. Three main findings are established.(1) There are significant long-run relationships between inflation and the fundamentals. (2) The error correction mechanism is stable in all specifications but in case of any disequilibrium, only financial depth is significant in adjusting inflation to the long-run relationship. (3) In the long-run, short-term adjustments in the ability of banks to transform money into credit do not matter in correcting inflation. This is most probably due to surplus liquidity issues. Policy implications are discussed.JEL Classification: E31: E51; O55

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“…Whereas the literature on the causes and impacts of the crisis in global food prices in the developing world has mushroomed in recent years (Piesse & Thirtle, 2009;Wodon & Zaman, 2010;Masters & Shively, 2008), we are unaware of studies that have closely examined how financial policies affected consumer prices. Remedial policy and pragmatic choices aimed at fighting inflation that have been documented include both short and medium term responses (SIFSIA, 2011).…”

Section: Introductionmentioning

confidence: 99%

Fighting Consumer Price Inflation in Africa. What Do Dynamics in Money, Credit, Efficiency and Size Tell Us?

Asongu

¹

2012

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Design/methodology/approach -We limit our sample to a panel of African countries for which inflation is non-stationary. VAR models from both error correction and Granger causality perspectives are applied. Analyses of dynamic shocks and responses are also covered. Six batteries of robustness checks are applied to ensure consistency in the results. Terms of use: Documents inFindings -(1) There are significant long-run equilibriums between inflation and each financial dynamic. (2) When there is a disequilibrium, while only financial depth and financial size could be significantly used to exert deflationary pressures, inflation is significant in adjusting all financial dynamics. In other words, financial depth and financial size are more significant instruments in fighting inflation than financial efficiency and activity. (3) The financial intermediary dynamic of size appears to be more instrumental in exerting a deflationary tendency than financial intermediary depth. (4) The deflationary tendency from money supply is double that based on liquid liabilities.Practical implications -Monetary policy aimed at fighting inflation only based on bank deposits may not be very effective until other informal and semi-formal financial sectors are taken into account. It could be inferred that, tight monetary policy targeting the ability of banks to grant credit (in relation to central bank credits) is more effective in tackling consumer price inflation than that, targeting the ability of banks to receive deposits. In the same vein, adjusting the lending rate could be more effective than adjusting the deposit rate. The insignificance of financial allocation efficiency and financial activity as policy tools in the battle against inflation could be explained by the (well documented) surplus liquidity issues experienced by the African banking sector. 3 campaigns involving strikes, demonstrations, marches, rallies and political crises that seriously disrupt economic performance could be mitigated. Social implicationsOriginality/value -As far as we have perused, there is yet no study that assesses monetary policy options that could be relevant in addressing the dramatic surge in the price of consumer commodities.

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“…Even in developed countries, volatility in fertiliser, chemical and fuel prices can limit crop inputs, with flow-on effects for production and food availability on world markets (Piesse and Thirtle 2009).…”

Section: Resiliencementioning

confidence: 99%

Genomic breeding for food, environment and livelihoods

Rivers

¹

,

Warthmann

²

,

Pogson

³

2015

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Land use management is a central challenge for the 21st century with unprecedented and competing demands to produce food, feed/fodder, fibre, fuel, and essential ecosystem services which sustain life. Global change requires rapid adaptation in current and emerging crops as well as in the foundation species of natural ecosystems. Revolutions in genomics and high throughput experimentation are transforming breeding so that adaptive traits in new environments can be predicted and selected more directly from germplasm collections of crops and wild species. This genomic breeding is now feasible in almost any species and has promise to help meet the need to feed and nourish over 9 billion people by 2050. Genomic techniques can accelerate our response to food security challenges of yield, quality and resilience and also address environmental security challenges. To achieve its potential there will need to be widespread and ongoing investments in the human capital to promote genomic breeding.

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Three bubbles and a panic: An explanatory review of recent food commodity price events

Cited by 239 publications

References 7 publications

Correcting Inflation with Financial Dynamic Fundamentals: Which Adjustments Matter in Africa?

Correcting Inflation with Financial Dynamic Fundamentals: Which Adjustments Matter in Africa?

Fighting Consumer Price Inflation in Africa. What Do Dynamics in Money, Credit, Efficiency and Size Tell Us?

Genomic breeding for food, environment and livelihoods

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