Cover IMF Working Papers
Food Price Shocks and Household Consumption in Developing Countries: The Role of Fiscal Policy
Author: Carine Meyimdjui and Jean-Louis Combes
Series:
IMF Working Papers
Volume/Issue:
Volume 2021: Issue 012
Language:
English
Publication Date:
15 Jan 2021
DOI:
https://doi.org/10.5089/9781513566887.001
ISBN:
9781513566887
ISSN:
1018-5941
Pages:
25
Keywords:
Import Food Price Shocks; Fiscal Policy.; WP; government consumption expenditure; government transfer; government expenditure; government subsidy; price shock
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
Download PDF (1.5 MB) Download Epub
This paper studies whether fiscal policy plays a stabilizing role in the context of import food price shocks. More precisely, the paper assesses whether fiscal policy dampens the adverse effect of import food price shocks on household consumption. Based on a panel of 70 low and middle-income countries over the period 1980-2012, the paper finds that import price shocks negatively and significantly affect household consumption, but this effect appears to be mitigated by discretionary government consumption, notably through government subsidies and transfers. The results are particularly robust for African countries and countries with less flexible exchange rate regimes.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund