|
This study analyzes the effects of international grain price variations on the domestic consumer price index using a nonlinear ARDL model, which significantly reduces specification errors. The key results show that only when international grain prices increase, the domestic consumer price index goes together with them but not vice versa. More specifically, when international grain price increased by 10%, the domestic total consumer price index went up by 0.39%. These results have significance as we obtained very similar results from our analysis of the effects of using individual products. Also, this study is distinguishable from others because we considered the possibility of omitted variable biases from exchange rates and imported prices of other goods closely correlated with imported grain prices. |
