Money, Meat, and Inflation: Using Price Data to Understand An Export Shock in Sudan

May 1, 2002

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Format: Chicago

Rodney Ramcharan. Money, Meat, and Inflation: Using Price Data to Understand An Export Shock in Sudan, (USA: International Monetary Fund, 2002) accessed November 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Sudanese inflation dramatically fell in 2000. But just prior to the sharp decline, an export ban was placed on Sudanese livestock. Motivated by this clue, and in the absence of any reliable income or employment data, this paper systematically develops simultaneous models of the consumer price index (CPI) and the exchange rate to assess the economic impact of the export ban. It finds that livestock exports play a large economic role as an important source of income and as a store of value. In the long run, livestock exports are positively associated with nonfood inflation. In the short run, food price movements are negatively associated with livestock exports: to help smooth income, lower food prices generate increased livestock exports. Therefore, unable to export livestock, farmers may have flooded the local market with meat, lowering food prices. Moreover, the loss of income and the decline in wealth lowered aggregate demand, leading to the decline in nonfood prices.

Subject: Agricultural commodities, Commodities, Consumption, Exchange rates, Export earnings, Food prices, Foreign exchange, Inflation, International trade, National accounts, Prices

Keywords: Agricultural commodities, Consumption, Exchange rate, Exchange rate movement, Exchange rates, Export ban, Export earnings, Food price inflation, Inflation, Inflation differential, Livestock, Livestock export revenue, Money, Money growth, Money price relationship, Money supply, Nonfood inflation, Rate of depreciation, WP

Publication Details

Pages:

40
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2002/084
Stock No:

WPIEA0842002
ISBN:

9781451850659
ISSN:

1018-5941

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