Author/Authors :
JAFFRI, ATIF ALI Department of Economics, Pakistan , JAFFRI, ATIF ALI University of Gujrat, Pakistan , MIRZA, FAISAL MEHMOOD Department of Economics, Pakistan , MIRZA, FAISAL MEHMOOD University of Gujrat, Pakistan , BASHIR, SAMRA Department of Economics, Pakistan , BASHIR, SAMRA University of Gujrat, Pakistan
Abstract :
This study investigates the nature of asymmetric passthrough of global food inflation to domestic inflation in Pakistan by using monthly data from 1993M2 to 2012M2. In this study, stationarity of the data is checked by applying Augmented Dickey Fuller (ADF) test. Ordinary Least Square (OLS) estimation results indicate that passthrough of global food inflation in consumer prices in Pakistan is asymmetric for the covered data period, i.e. domestic prices respond differently in the period of global surge in food prices as compared to fall in prices. The policy recommendation based on the results is that government should protect marginalized segments of the economy from abnormal effects of global food inflation to save them from food insecurity, poverty and vulnerability.
