Pass-Through Effects of Global Food Prices on Consumer Prices in Iran

Authors

1 Department of Agricultural Economics, University of Tabriz, Iran (Corresponding Author: ebrahimjavdan@tabrizu.ac.ir).

2 Professor, Department of Economics, University of Tabriz, Iran (haghighat@tabrizu.ac.ir).

3 Department of Agricultural Economics, University of Tabriz, Iran (pishbahar@tabrizu.ac.ir).

4 University of Central Lancashire, Lancashire, UK (PKostov@uclan.ac.uk).

5 Department of Agricultural Economics, University of Tabriz, Iran (rmrezaei@tabrizu.ac.ir).

Abstract

T





he objective of this study is using the Markov Switching Vector Autoregressive method and regime dependent impulse response functions to measure the pass-through of world food prices to consumer price index in Iran from 1990 to 2013. With respect to information criteria and the log-likelihood ratio statistic, MSIA(2)-VAR(1) model has a better fit to data than other models. The magnitude of the pass-through in first and second regimes is respectively 0.43 and 0.94 after two years. We show that the magnitude of the pass-through from world food prices to consumer price index resulting from recent world food price shocks has been higher than before.

Keywords

References

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Iranian Economic Review
Volume 21, Issue 1
March 2017
Pages 169-180

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