Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/88153
Authors: 
Belke, Ansgar
Dreger, Christian
Year of Publication: 
2013
Series/Report no.: 
DIW Discussion Papers 1332
Abstract: 
This paper investigates the effects of global oil and food price shocks to consumer prices in Middle East-North African (MENA) countries using threshold cointegration methods. Oil and food price shocks increase domestic prices in the long run, whereby the impact of food prices dominates. While global prices are weakly exogenous, consumer prices respond to deviations from the equilibrium relationship. The short run adjustment pattern exhibits asymmetries and is particularly strong after positive shocks. Downward rigidities on wages may play a crucial role in this regard, as the relatively weak reactions of consumer prices after negative shocks are related to labour market institutions and public subsidies. The more rigid the regulations the more pronounced are the asymmetries. Robustness checks show that international price shocks do not affect GDP growth.
Subjects: 
oil and food price transmission
asymmetric error correction
MENA region
JEL: 
C22
E31
Q02
Document Type: 
Working Paper

Files in This Item:
File
Size
387.52 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.