E-mail alert  |  Contact  
Search:       Go  
Background  |   Sponsoring institutions  |   Editorial board   |   Advisory board   |   Associate editors
Call for papers  |   Submission guidelines  |   Editorial process
Current issue  |   Past issues  |  
March 2012 issue
List of authors
 
Coletti, Devereux, Levin, Walsh, Williams
Lama, Medina
Faust
Glocker, Towbin
Bordo, Humpage, Schwartz
King
Ferrucci, Jiménez-Rodriguez, Onorante
Lipínska, Millard
Hamilton
IJCB Home   Read the journal   Past issue
Past issues
2017
 
December
September
June
March
February
2016
 
December
September
June
March
2015
 
December
September
June
March
January
2014
 
December
September
June
March
2013
 
December
September
June
March
January
2012
 
December
September
June
March
January
2011
 
December
September
June
March
2010
 
December
September
June
March
2009
 
December
September
June
March
2008
 
December
September
June
March
2007
 
December
September
June
March
2006
 
December
September
June
March
2005
 
December
September
May

Food Price Pass-Through in the Euro Area: Non-Linearities and the Role of the Common Agricultural Policy

by Gianluigi Ferruccia, Rebeca Jiménez-Rodríguezb, and Luca Onorantea a

Abstract

In this paper we analyze the pass-through of a commodity price shock along the food price chain in the euro area. Departing from the existing literature, which focuses on food commodity prices as quoted in international markets, we use a novel database that accounts for the role of the Common Agricultural Policy in the European Union. We model several departures from the linear pass-through benchmark and compare alternative specifications with aggregate and disaggregate data. Overall, when the appropriate data set and methodology are used, it is possible to identify a significant and long-lasting pass-through. The results of our regressions are applied to the food price shock in the 2007–08 period; a decomposition exercise shows that commodity prices are the main determinant of the increase in producer and consumer prices, thus solving the puzzle highlighted in the existing literature for the euro area.

JEL Codes: C32, C53, E3, Q17.

 
Full article (PDF, 39 pages 735 kb)

Discussion by Tsutomu Watanabe


a European Central Bank
b University of Salamanca