How Does Global Energy Prices Drive Food Prices in South Asia? Empirical Evidence from Panel NARDL Estimations
DOI:
https://doi.org/10.18533/vkskbp75Abstract
The paper aims to investigate the asymmetric relationship between global energy price (oil and coal) and regional food price in South Asia. Using monthly panel data of 5 South Asian countries from January, 2000 - June, 2021; a nonlinear ARDL estimation is conducted for both short and long run. The results suggest that short run changes in oil and coal price do not affect food prices in South Asia. However, a 1% increase in international oil price increases food price by 1.72% -2.45% and a 1% increase in international coal price increases food price by 0.64-0.76% in the long run. Interestingly, a fall in international oil and coal prices do not reduce food price in South Asia. Rather, A 1% decrease in international oil price increases food price by 1.32% - 2.47% and a 1% decrease in international coal price increases food price by 0.67%-0.85%.
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