Empirical analysis of food price inflation in Pakistan
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Date
2012
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Abstract
This study focuses on the identification of main determinants of food price inflation in Pakistan.
Using the data from 1972 to 2008, Johansen’s co-integration technique is utilized to find out the long run
relationships among food price inflation and its determinants like inflation expectations, money supply, per
capita GDP, support prices, food imports and food exports. Empirical findings prove the long run relationships
among food price inflation and its determinants. All the determinants affect food price inflation positively and
significantly except money supply which is insignificant with correct positive sign. In the short run, only
inflation expectations, support prices and food exports affect the food price inflation. The results reveal that
both demand and supply side factors are the determinants food price inflation in Pakistan. However, our study
supports the structulists’ point of view of inflation as money supply shows insignificant results.
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Keywords
Food Price Inflation, Inflation Expectations, Food Exports, Food Imports, Support Prices, Money Supply
Citation
World Applied Sciences Journal 16 (7): 933-939, 2012