How do Economic Growth and Food Inflation Affect Food Insecurity?

By Christian Bogmans, Andrea Pescatori, Ervin Prifti

September 6, 2024

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Format: Chicago

Christian Bogmans, Andrea Pescatori, and Ervin Prifti. How do Economic Growth and Food Inflation Affect Food Insecurity?, (USA: International Monetary Fund, 2024) accessed December 21, 2024

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.

Summary

During the global recession of 2020 food insecurity increased substantially in many countries around the world. Fortunately, the surge in food insecurity quickly came to a halt as the world economy returned to its positive growth path, despite double-digit domestic food inflation in most countries. To shed light on the relative importance of income growth and food inflation in driving food insecurity, we employ a heterogeneous-agent model with income inequality, complemented by novel cross-country data for the period 2001-2021. We use external instruments (changes in commodity terms-of-trade, external economic growth, and harvest shocks) to isolate exogenous variation in domestic income growth and ood inflation. Our findings suggest that income growth is the dominant driver of annual variations in food insecurity, while food price inflation plays a somewhat smaller role, aligning with our model predictions.

Subject: Food prices, Food security, Income, Income inequality, Inflation, National accounts, Poverty, Price elasticity, Prices

Keywords: Diet., Food inflation, Food insecurity, Food prices, Food security, Global, Inclusive growth, Income, Income inequality, Inequality, Inflation, Price elasticity

Publication Details

Pages:

57
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2024/188
Stock No:

WPIEA2024188
ISBN:

9798400287336
ISSN:

1018-5941

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