Analyzing Food Price Trends in the Context of Engel’s Law and the Prebisch-Singer Hypothesis

Income growth in emerging economies has often been cited as a key driver of the past decade’s com-modity price boom—the longest and broadest boom since World War II. This paper shows that income has a negative and highly significant effect on real...

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Main Authors:	Baffes, John, Etienne, Xiaoli L.
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2015
Subjects:	PRODUCER PRICE INDEX GROWTH RATES FOOD PRICE MONETARY POLICY UNDERDEVELOPED COUNTRIES PRICE INCREASES LAGS DEVELOPING COUNTRIES PRICE SERIES STOCK ENERGY PRICES INCOME INTEREST SUPPLY SHOCKS REAL EXCHANGE RATES POWER PARITY EQUILIBRIUM PRICE EXPECTATIONS DEMAND GROWTH COMMODITY PRICE AVERAGE PRICES EMERGING ECONOMIES INTEREST RATE EXCHANGE GDP PER CAPITA EXPORTS ELASTICITY PRODUCER PRICES POLITICAL ECONOMY FOOD PRICES PRICE INDICES FISCAL POLICY EQUILIBRIUM VARIABLES PRICING EXCHANGE RATE DEVELOPING COUNTRY PRICE TREASURY BILL INFLATION PRODUCER PRICE TRENDS PRICE FLUCTUATIONS DEVELOPMENT INFLUENCE PER CAPITA INCOME MARKET REFORMS DEVELOPMENT ECONOMICS RESERVE BANK PRICE CHANGES PRICE VOLATILITY PRODUCTS EXCHANGE RATES INTEREST RATES INDUSTRIALIZATION MARKETS MARKETING DEBT AGRICULTURAL PRICES PRICE ELASTICITY PRODUCT REAL INTEREST RATE INVENTORIES PRICING POLICIES CLOSED‐ECONOMY INVENTORY PURCHASING POWER MARKET PRICE PRICE INFLATION EXPENDITURE INCOME MEASURES COMMODITY EXPORTS CONSUMPTION TECHNOLOGICAL CHANGE MARKET PRICES DISTRIBUTED LAGS PRICE TRENDS AVERAGE PRICE INTERNATIONAL TRADE VOLATILITY STANDARD OF LIVING FUTURE FUTURE PRICE VALUE CONSUMER PRICE INDEX CONSUMER PRICE FOREIGN INVESTMENT DEMAND AGGREGATE DEMAND AGRICULTURE CONSUMERS EXPENDITURES INCOMES BORROWING COUNTRIES MARKET INCOME EFFECT ECONOMICS TREASURY RATE OF GROWTH PRICE MOVEMENTS INSURANCE TAXATION CURRENCIES COMMODITY PRICES ECONOMIC DEVELOPMENT MANUFACTURING INDUSTRIES TRADE COPPER PRICE GDP GOODS SECURITY STOCKS BARTER INVESTMENT SHARE SUPPLY PURCHASING BANKING COMMODITIES MIDDLE‐INCOME COUNTRIES PRICE INDEX COMMODITY PRICES ENERGY PRICE PRODUCTION COSTS DEVELOPMENT POLICY INCOME GROUPS
Online Access:	http://documents.worldbank.org/curated/en/2015/09/25093870/analyzing-food-price-trends-context-engel’s-law-prebisch-singer-hypothesis http://hdl.handle.net/10986/22843

id	okr-10986-22843
recordtype	oai_dc
spelling	okr-10986-228432021-04-23T14:04:11Z Analyzing Food Price Trends in the Context of Engel’s Law and the Prebisch-Singer Hypothesis Baffes, John Etienne, Xiaoli L. PRODUCER PRICE INDEX GROWTH RATES FOOD PRICE MONETARY POLICY UNDERDEVELOPED COUNTRIES PRICE INCREASES LAGS DEVELOPING COUNTRIES PRICE SERIES STOCK ENERGY PRICES INCOME INTEREST SUPPLY SHOCKS REAL EXCHANGE RATES POWER PARITY EQUILIBRIUM PRICE EXPECTATIONS DEMAND GROWTH COMMODITY PRICE AVERAGE PRICES EMERGING ECONOMIES INTEREST RATE EXCHANGE GDP PER CAPITA DEVELOPING COUNTRIES EXPORTS ELASTICITY PRODUCER PRICES POLITICAL ECONOMY FOOD PRICES PRICE INDICES FISCAL POLICY EQUILIBRIUM VARIABLES PRICING EXCHANGE RATE DEVELOPING COUNTRY PRICE INTEREST RATE TREASURY BILL INFLATION PRICE INCREASES PRODUCER PRICE DEVELOPING COUNTRY TRENDS PRICE FLUCTUATIONS DEVELOPMENT INFLUENCE PER CAPITA INCOME MARKET REFORMS DEVELOPMENT ECONOMICS RESERVE BANK PRICE CHANGES EMERGING ECONOMIES PRICE VOLATILITY FOOD PRICE PRODUCTS EXCHANGE RATES INTEREST RATES INDUSTRIALIZATION SUPPLY SHOCKS MARKETS MARKETING DEBT INTEREST RATES AGRICULTURAL PRICES PRICE SERIES PRICE ELASTICITY PRODUCT REAL INTEREST RATE INVENTORIES PRICING POLICIES CLOSED‐ECONOMY INVENTORY AGRICULTURAL PRICES COMMODITY PRICE PURCHASING POWER POWER PARITY MARKET PRICE PRICE INFLATION EXPENDITURE INCOME MEASURES EQUILIBRIUM PRICE COMMODITY EXPORTS CONSUMPTION TECHNOLOGICAL CHANGE MARKET PRICES DISTRIBUTED LAGS PRODUCER PRICES PRICE TRENDS AVERAGE PRICE INTERNATIONAL TRADE VOLATILITY PRICING POLICIES STANDARD OF LIVING MARKET PRICES FUTURE FUTURE PRICE VALUE CONSUMER PRICE INDEX PRODUCER PRICE MONETARY POLICY PURCHASING POWER CONSUMER PRICE FOREIGN INVESTMENT DEMAND GROWTH RATES AGGREGATE DEMAND CONSUMER PRICE PRICE CHANGES AGRICULTURE CONSUMERS EXPENDITURES INCOMES PRICE FLUCTUATIONS EXCHANGE RATES BORROWING COUNTRIES AVERAGE PRICE DEMAND GROWTH MARKET ENERGY PRICES INCOME EFFECT ECONOMICS TREASURY RATE OF GROWTH PRICE MOVEMENTS STANDARD OF LIVING INSURANCE TREASURY BILL TAXATION CURRENCIES COMMODITY PRICES ECONOMIC DEVELOPMENT MANUFACTURING INDUSTRIES TRADE COPPER PRICE GDP GOODS SECURITY UNDERDEVELOPED COUNTRIES STOCKS BARTER INVESTMENT SHARE ECONOMIC DEVELOPMENT SUPPLY PURCHASING BANKING FISCAL POLICY RATE OF GROWTH CONSUMER PRICE INDEX INTERNATIONAL TRADE PRODUCER PRICE INDEX MARKET REFORMS COMMODITIES EXCHANGE RATE MIDDLE‐INCOME COUNTRIES FOOD PRICES PRICE MOVEMENTS PRICE INDEX COMMODITY PRICES COMMODITY PRICES ENERGY PRICE PRODUCTION COSTS DEVELOPMENT POLICY INCOME GROUPS MANUFACTURING INDUSTRIES Income growth in emerging economies has often been cited as a key driver of the past decade’s com-modity price boom—the longest and broadest boom since World War II. This paper shows that income has a negative and highly significant effect on real food commodity prices, a finding that is consistent with Engel’s Law and Kindleberger’s thesis, the predecessors of the Prebisch-Singer hypothe-sis. The paper also shows that, in the long run, income influences real food prices mainly through the manufacturing price channel (the deflator), hence weakening the view that income growth exerts strong upward pressure on food prices. Other (short-term) drivers of food prices include energy costs, inventories, and monetary conditions. 2015-11-04T21:49:21Z 2015-11-04T21:49:21Z 2015-09 Working Paper http://documents.worldbank.org/curated/en/2015/09/25093870/analyzing-food-price-trends-context-engel’s-law-prebisch-singer-hypothesis http://hdl.handle.net/10986/22843 English en_US Policy Research Working Paper;No. 7424 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	PRODUCER PRICE INDEX GROWTH RATES FOOD PRICE MONETARY POLICY UNDERDEVELOPED COUNTRIES PRICE INCREASES LAGS DEVELOPING COUNTRIES PRICE SERIES STOCK ENERGY PRICES INCOME INTEREST SUPPLY SHOCKS REAL EXCHANGE RATES POWER PARITY EQUILIBRIUM PRICE EXPECTATIONS DEMAND GROWTH COMMODITY PRICE AVERAGE PRICES EMERGING ECONOMIES INTEREST RATE EXCHANGE GDP PER CAPITA DEVELOPING COUNTRIES EXPORTS ELASTICITY PRODUCER PRICES POLITICAL ECONOMY FOOD PRICES PRICE INDICES FISCAL POLICY EQUILIBRIUM VARIABLES PRICING EXCHANGE RATE DEVELOPING COUNTRY PRICE INTEREST RATE TREASURY BILL INFLATION PRICE INCREASES PRODUCER PRICE DEVELOPING COUNTRY TRENDS PRICE FLUCTUATIONS DEVELOPMENT INFLUENCE PER CAPITA INCOME MARKET REFORMS DEVELOPMENT ECONOMICS RESERVE BANK PRICE CHANGES EMERGING ECONOMIES PRICE VOLATILITY FOOD PRICE PRODUCTS EXCHANGE RATES INTEREST RATES INDUSTRIALIZATION SUPPLY SHOCKS MARKETS MARKETING DEBT INTEREST RATES AGRICULTURAL PRICES PRICE SERIES PRICE ELASTICITY PRODUCT REAL INTEREST RATE INVENTORIES PRICING POLICIES CLOSED‐ECONOMY INVENTORY AGRICULTURAL PRICES COMMODITY PRICE PURCHASING POWER POWER PARITY MARKET PRICE PRICE INFLATION EXPENDITURE INCOME MEASURES EQUILIBRIUM PRICE COMMODITY EXPORTS CONSUMPTION TECHNOLOGICAL CHANGE MARKET PRICES DISTRIBUTED LAGS PRODUCER PRICES PRICE TRENDS AVERAGE PRICE INTERNATIONAL TRADE VOLATILITY PRICING POLICIES STANDARD OF LIVING MARKET PRICES FUTURE FUTURE PRICE VALUE CONSUMER PRICE INDEX PRODUCER PRICE MONETARY POLICY PURCHASING POWER CONSUMER PRICE FOREIGN INVESTMENT DEMAND GROWTH RATES AGGREGATE DEMAND CONSUMER PRICE PRICE CHANGES AGRICULTURE CONSUMERS EXPENDITURES INCOMES PRICE FLUCTUATIONS EXCHANGE RATES BORROWING COUNTRIES AVERAGE PRICE DEMAND GROWTH MARKET ENERGY PRICES INCOME EFFECT ECONOMICS TREASURY RATE OF GROWTH PRICE MOVEMENTS STANDARD OF LIVING INSURANCE TREASURY BILL TAXATION CURRENCIES COMMODITY PRICES ECONOMIC DEVELOPMENT MANUFACTURING INDUSTRIES TRADE COPPER PRICE GDP GOODS SECURITY UNDERDEVELOPED COUNTRIES STOCKS BARTER INVESTMENT SHARE ECONOMIC DEVELOPMENT SUPPLY PURCHASING BANKING FISCAL POLICY RATE OF GROWTH CONSUMER PRICE INDEX INTERNATIONAL TRADE PRODUCER PRICE INDEX MARKET REFORMS COMMODITIES EXCHANGE RATE MIDDLE‐INCOME COUNTRIES FOOD PRICES PRICE MOVEMENTS PRICE INDEX COMMODITY PRICES COMMODITY PRICES ENERGY PRICE PRODUCTION COSTS DEVELOPMENT POLICY INCOME GROUPS MANUFACTURING INDUSTRIES
spellingShingle	PRODUCER PRICE INDEX GROWTH RATES FOOD PRICE MONETARY POLICY UNDERDEVELOPED COUNTRIES PRICE INCREASES LAGS DEVELOPING COUNTRIES PRICE SERIES STOCK ENERGY PRICES INCOME INTEREST SUPPLY SHOCKS REAL EXCHANGE RATES POWER PARITY EQUILIBRIUM PRICE EXPECTATIONS DEMAND GROWTH COMMODITY PRICE AVERAGE PRICES EMERGING ECONOMIES INTEREST RATE EXCHANGE GDP PER CAPITA DEVELOPING COUNTRIES EXPORTS ELASTICITY PRODUCER PRICES POLITICAL ECONOMY FOOD PRICES PRICE INDICES FISCAL POLICY EQUILIBRIUM VARIABLES PRICING EXCHANGE RATE DEVELOPING COUNTRY PRICE INTEREST RATE TREASURY BILL INFLATION PRICE INCREASES PRODUCER PRICE DEVELOPING COUNTRY TRENDS PRICE FLUCTUATIONS DEVELOPMENT INFLUENCE PER CAPITA INCOME MARKET REFORMS DEVELOPMENT ECONOMICS RESERVE BANK PRICE CHANGES EMERGING ECONOMIES PRICE VOLATILITY FOOD PRICE PRODUCTS EXCHANGE RATES INTEREST RATES INDUSTRIALIZATION SUPPLY SHOCKS MARKETS MARKETING DEBT INTEREST RATES AGRICULTURAL PRICES PRICE SERIES PRICE ELASTICITY PRODUCT REAL INTEREST RATE INVENTORIES PRICING POLICIES CLOSED‐ECONOMY INVENTORY AGRICULTURAL PRICES COMMODITY PRICE PURCHASING POWER POWER PARITY MARKET PRICE PRICE INFLATION EXPENDITURE INCOME MEASURES EQUILIBRIUM PRICE COMMODITY EXPORTS CONSUMPTION TECHNOLOGICAL CHANGE MARKET PRICES DISTRIBUTED LAGS PRODUCER PRICES PRICE TRENDS AVERAGE PRICE INTERNATIONAL TRADE VOLATILITY PRICING POLICIES STANDARD OF LIVING MARKET PRICES FUTURE FUTURE PRICE VALUE CONSUMER PRICE INDEX PRODUCER PRICE MONETARY POLICY PURCHASING POWER CONSUMER PRICE FOREIGN INVESTMENT DEMAND GROWTH RATES AGGREGATE DEMAND CONSUMER PRICE PRICE CHANGES AGRICULTURE CONSUMERS EXPENDITURES INCOMES PRICE FLUCTUATIONS EXCHANGE RATES BORROWING COUNTRIES AVERAGE PRICE DEMAND GROWTH MARKET ENERGY PRICES INCOME EFFECT ECONOMICS TREASURY RATE OF GROWTH PRICE MOVEMENTS STANDARD OF LIVING INSURANCE TREASURY BILL TAXATION CURRENCIES COMMODITY PRICES ECONOMIC DEVELOPMENT MANUFACTURING INDUSTRIES TRADE COPPER PRICE GDP GOODS SECURITY UNDERDEVELOPED COUNTRIES STOCKS BARTER INVESTMENT SHARE ECONOMIC DEVELOPMENT SUPPLY PURCHASING BANKING FISCAL POLICY RATE OF GROWTH CONSUMER PRICE INDEX INTERNATIONAL TRADE PRODUCER PRICE INDEX MARKET REFORMS COMMODITIES EXCHANGE RATE MIDDLE‐INCOME COUNTRIES FOOD PRICES PRICE MOVEMENTS PRICE INDEX COMMODITY PRICES COMMODITY PRICES ENERGY PRICE PRODUCTION COSTS DEVELOPMENT POLICY INCOME GROUPS MANUFACTURING INDUSTRIES Baffes, John Etienne, Xiaoli L. Analyzing Food Price Trends in the Context of Engel’s Law and the Prebisch-Singer Hypothesis
relation	Policy Research Working Paper;No. 7424
description	Income growth in emerging economies has often been cited as a key driver of the past decade’s com-modity price boom—the longest and broadest boom since World War II. This paper shows that income has a negative and highly significant effect on real food commodity prices, a finding that is consistent with Engel’s Law and Kindleberger’s thesis, the predecessors of the Prebisch-Singer hypothe-sis. The paper also shows that, in the long run, income influences real food prices mainly through the manufacturing price channel (the deflator), hence weakening the view that income growth exerts strong upward pressure on food prices. Other (short-term) drivers of food prices include energy costs, inventories, and monetary conditions.
format	Working Paper
author	Baffes, John Etienne, Xiaoli L.
author_facet	Baffes, John Etienne, Xiaoli L.
author_sort	Baffes, John
title	Analyzing Food Price Trends in the Context of Engel’s Law and the Prebisch-Singer Hypothesis
title_short	Analyzing Food Price Trends in the Context of Engel’s Law and the Prebisch-Singer Hypothesis
title_full	Analyzing Food Price Trends in the Context of Engel’s Law and the Prebisch-Singer Hypothesis
title_fullStr	Analyzing Food Price Trends in the Context of Engel’s Law and the Prebisch-Singer Hypothesis
title_full_unstemmed	Analyzing Food Price Trends in the Context of Engel’s Law and the Prebisch-Singer Hypothesis
title_sort	analyzing food price trends in the context of engel’s law and the prebisch-singer hypothesis
publisher	World Bank, Washington, DC
publishDate	2015
url	http://documents.worldbank.org/curated/en/2015/09/25093870/analyzing-food-price-trends-context-engel’s-law-prebisch-singer-hypothesis http://hdl.handle.net/10986/22843
_version_	1764452207158099968

Analyzing Food Price Trends in the Context of Engel’s Law and the Prebisch-Singer Hypothesis

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